This Primary Authority Advice has been produced by Warwickshire County Council Trading Standards Service, in partnership with The Property Ombudsman and Propertymark, for use by member businesses as an aid to complying with the law. If you follow this advice correctly, your local Trading Standards Service should respect this and not ask you to comply with the law in a different way. If you are contacted by a local authority enforcement body, please inform them that you are a member of the scheme.
Assured advice issued:
Are letting agreements entered into between landlords and agents for the letting of a property covered by the 2013 Regulations?
The CICAR regulations will apply to contracts for the services a letting agent provides to a consumer landlord, e.g. marketing a property for let, vetting potential tenants, undertaking checks etc.
A consumer landlord was defined in the case Office of Fair Trading v Foxtons Ltd:
A consumer landlord must be an individual and not a company. Secondly, in letting the property the landlord must be acting 'for purposes outside his trade, business or profession.' Consumer landlords include individuals
- who let out their property whilst travelling abroad
- who let out part of their property in order to fund their mortgage
- whose property investment represents part of their pension plan or other long term saving.
The CICAR do not apply to tenancy agreements between landlords and tenants due to the exemption in Regulation 6(1)(d).
An individual that is named in the tenancy agreement as a guarantor would not be covered by CICAR due to the fact that they are themselves not entering into a service or sales contract, as defined in regulation 5.
A contract for the marketing of properties would be covered by CICAR. It is important to bear in mind where & when the contract is entered into.
A – Consumer visits an estate agency to form a contract for the agent to market their property. (On Premises Contract) The agent must provide all the information to the consumer as set out in schedule 1 of CICAR, as required by regulation 9. There is no right to cancel.
B – Agents visits consumer in their home to form a contract to market the property. (Off premises Contract)
The agent must provide all the information as set out in schedule 2 of CICAR, as required by regulation 10, and must also provide the cancellation form as set out in Part B of schedule 3
The instructions for cancellation can be found in Schedule 3, part A. The format for the cancellation notice can be found in Part B of Schedule 3, as set out below:
Model cancellation form
To [here the trader’s name, geographical address and, where available, fax number and email address are to be inserted by the trader]:
I/We [*] hereby give notice that I/We [*] cancel my/our [*] contract of sale of the following goods [*]/for the supply of the following service [*],
Ordered on [*]/received on [*],
Name of consumer(s),
Address of consumer(s),
Signature of consumer(s) (only if this form is notified on paper),
[*] Delete as appropriate.
The cancellation form must be given to the consumer with the information relating to the contract before the consumer agrees and signs the contract (regulation 10).
What happens if an agent leaves the service contract (unsigned) at the consumer’s home, then the consumer either signs and posts back or drops back into the office?
When the contract is left with the consumer and the agent leaves the premises, we would consider that the contract will be an on-premises contract (thus no right to cancel) if the consumer either posted or hand delivered the contract back to the agent at a later date.
However, if the consumer returned a contract to the agent immediately, following the visit by the agent to the consumer’s home, then this would be considered an offpremises contract (cancellation rights would apply).
In our opinion, in the absence of case law, we would say that any action taken by the consumer within a period of one hour starting from the time the agent left the consumer’s home, would be considered an immediate action.
If the agent visited a property to provide a valuation but left a phone number rather than any paperwork, how would the regulations apply?
Where a vendor makes a telephone call to an agent following the visit by that agent to the property within the hour of leaving the property, then this contact would be considered immediate; however, the right to cancellation would not apply, because the contract is not concluded at that point. In essence the consumer is simply stating their intention to enter into an agreement with the agent at that point.
For a contract to be concluded a circumspect consumer would reasonably want to read through the terms in a contract before signing and being bound by those terms. This conclusion would occur when the consumer receives the paper contract, reads it, signs it and returns to the agent. This activity is likely to occur outside an hour and thus cancellation rights would not apply.
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