CMA publishes consumer protection guidance for lettings industry
The Competition and Markets Authority (CMA) has today published comprehensive guidance for lettings professionals to help improve their understanding of, and compliance with, consumer protection law.
The guidance follows the publication last year of a wide-ranging report into the lettings market by the CMA’s predecessor, the Office of Fair Trading (OFT), which raised concerns about a number of unsatisfactory practices affecting tenants, including unfair and ‘surprise’ fees and charges, poor service and delayed and substandard repairs. The OFT considered that greater compliance with existing legislation would improve the way the lettings market works.
The result of constructive engagement with the lettings industry and other stakeholders, this guidance will help lettings professionals to understand their responsibilities under consumer and business protection regulations. The CMA has worked closely with trading standards services to agree how the law should be applied to the most problematic practices and to identify enforcement priorities, so that together they can tackle non-compliance and improve the way the market functions.
The guidance includes practical advice such as:
- ensuring that tenants and the lettings agent’s landlord clients know what charges and fees they will have to pay and what these are for
- avoiding using misleading advertising or statements, and ensuring that the tenant or landlord is given all the information they need, at the appropriate time
- providing clear information which the tenant needs to know before they move in (such as guarantor and deposit requirements, and the terms and conditions of the tenancy agreement)
- dealing fairly and professionally with tenants and landlords, and using fair contractual terms
- ensuring that services and repairs are carried out in a timely manner and with reasonable care and skill
- giving clear and full information to tenants about how to end a tenancy agreement
The guidance is intended to complement existing and emerging industry schemes and codes of conduct, and is relevant to lettings professionals in England, Wales, Scotland and Northern Ireland, highlighting national variations in legislation.
Nisha Arora, CMA Senior Director, Consumer, said:
Renting a property is a big financial commitment, and it is important that tenants can be confident that their landlord or letting agent will treat them fairly. This guidance will help lettings professionals understand how to comply with the law and should ultimately improve overall standards in the market.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. From 1 April 2014 it took over the functions of the Competition Commission and the competition and certain consumer functions of the OFT, as amended by the Enterprise and Regulatory Reform Act 2013.
- Further information about the guidance can be found on the publication page and the draft guidance consultation response page, and details of the OFT’s review of the lettings market and consultation with the industry can be found on The National Archives.
- The guidance focuses on five pieces of UK wide legislation - The Consumer Protection from Unfair Trading Regulations 2008 (CPRs), The Business Protection from Misleading Marketing Regulations 2008 (BPRs), The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs), The Supply of Goods and Services Act 1982 (SGSA) and the Unfair Contract Terms Act 1977 (UCTA).
- The CMA’s guidance is designed to help letting agents and landlords to comply with their obligations under consumer protection law. The Department for Communities and Local Government (DCLG) has produced a ‘How to rent’ guide for prospective tenants which gives an overview of their rights and responsibilities. The CMA welcomes this publication as the lack of understanding by tenants of their rights and responsibilities was identified by the OFT’s Market Review of the Lettings Sector in February 2013 as one reason why the market is not working as well as it should.
- DCLG is also working with the Royal Institution for Chartered Surveyors (RICS) to develop a code for the management of residential property in the private rented sector. The CMA’s guidance is intended to complement industry codes of conduct, such as RICS’ Private Rented Sector Code, which are a key means of driving greater compliance with consumer protection law in the sector.