Distance Selling

We have noted a marked increase in queries regarding consumer protection legislation. As such a little reminder about the The Consumer Protection (Distance Selling) Regulations 2000 may be of some help.
These regulations are secondary legislation under the European Communities Act 1985 and the intention behind them is to regulate distance selling business transactions. That is contracts concluded at a distance where there has been no face to face contact, which are for the provision of services. Tenancy agreements are specifically included within the general scope of the Regulations, because the tenant will have been supplied with a service, and so the Regulations will apply to landlords in distance selling situations and therefore agents should familiarise themselves with the basic provisions.
The regulations have 2 important effects for landlords regarding distance contracts, which the agent should ensure that the Landlord is aware of:
1. allow the tenant the right to cancel the distance contract
2. require that a landlord (or agent on his behalf) provides certain specified information to the tenant
The Regulations imply a right to cancel by the tenant into any distance contract under the Regulations unless this right has been specifically excluded by agreement of the parties.
Cancellation operates when the tenant gives a notice of cancellation to the landlord or the agent on his behalf if permitted. Where it applies, the right to cancel can be exercised by the tenant within seven working days of concluding the agreement if the Written Information requirements have been complied with, or within three months and seven working days if they have not.
Agents should note that the tenant’s right to cancel does not apply for the supply of services if the tenancy has started and the tenant has been informed that there will be no rights to cancel the contract once it had started. It is therefore recommended that agents attempt, where possible, to have the agreement signed in their presence at the time they release the keys for the property.
The Written Information that must be supplied to the Tenant prior to the signing of the tenancy agreement is mostly in the tenancy agreement itself and includes such things as the Landlord’s and where applicable the Agents contact details, the fees in arranging the agreement if applicable, the rent payable, the duration of the agreement and so on.
We have noted that many people assume that the Regulations apply to Guarantor Agreements however given that the Guarantor receives no service for entering into the agreement, this is inaccurate.
Incidentally, contrary to some advice we have seen, the Cancellation of Contracts Made in a Consumer’s Home or Place of Work Etc Regulations 2008 also does not apply to guarantee agreements as no service is provided and it does not cover tenancy agreement but do cover agent’s terms of business.

Filed under: Uncategorized , consumer protection, regulations, revision

Further Energy Performance Tweaks

The Energy Performance of Buildings (Certificates and Inspections) (England & Wales) (Amendment) Regulations 2009 came into force on 10 August 2009.

These make a small amendment to the EPC regulations to allow for disclosure of EPCs, recommendations and Display Energy Certificates on the sale of properties. Where an EPC is produced for a property which is for sale and the rating on the certificate is in bands F or G the keeper of the EPC register (ie. one of the licensed bodies who register and maintain records of inspectors) is permitted to disclose the certificate to the Energy Saving Trust Ltd, a body licensed by government to provide information and advice in relation to energy saving in the home.

The objective of the disclosure is to allow the trust to provide information to the owner of the property on things they can do to improve the efficiency of the property and grants that might be available to pay for the improvements.

In general this will have limited effects on the sector except to encourage improvement of less efficient properties. This may be of benefit as these properties are generally less desirable and harder to sell although, in truth, most agents will already be pointing vendors and landlords towards the trust and its free advisory services in any event.

Filed under: Uncategorized , energy efficiency, Europe, regulations

Gas Safe Register Confusion

Gas Safe Register appear to be advising on their helpline that a landlord is obliged to obtain a new gas safety certificate every time a tenancy is entered into, notwithstanding any current gas safety certificate that is in place. This is not the position.

The Landlord (or the Agent if it forms part of the terms of business) is required to arrange the annual preparation of a gas safety certificate and ensure that throughout any tenancy a valid gas safety certificate is in place at all times.

An annual gas safety check must be carried out by a Gas Safe Registered engineer. A record of the safety check must be kept for 2 years. A copy of the certificate must be issued to each existing tenant within 28 days of the check being completed, and in any event before the commencement of a tenancy.

This is consistent with the advice as given on the Gas Safe Register website.

The relevant legislation can be read here.

Filed under: Uncategorized , gas safety, regulations

Sale and Rent Back Regulation

The Financial Services Authority has released more details of its plans to regulate the sale and rent back sector. In the downturn this sector has grown substantially and unscrupulous lenders have excited the interest of the Office of Fair Trading and HM Treasury due to a lack of good information being given to consumers.  This is an interim regime and will ultimately be replaced by a full regime which is expected to come into operation on 30 June 2010.

Unauthorised firms operating in the sale and lease back sector will now need to seek authorisation from the FSA.  The scheme is expected to come into operation on 1 July 2009 and firms will have until 1 August 2009 to seek authorisation.  Already authorised firms will need to apply for a variation of permission to allow them to continue to operate.

Firms wishing to apply for authorisation should look at this page on the FSA website which contains information to assist with an application including the type of information that will need to accompany the application. The FSA states that the page will soon also contain draft application forms.

Filed under: Uncategorized , FSA, regulations, sale and lease back

Electrical Safety in Dwellings- A Reminder

The Gas Safety (Installations and Use) regulations 1998 require landlords to ensure that the gas appliances in their property are safe.  These regulations were supported and policed by the Council for Registered Gas Installers (CORGI) and now the Gas Safe Register.

There are similar statutory requirement for landlords to maintain electrical systems under their control in a safe condition, the legislation is less explicit and there is no electrical equivalent of the Gas Safe Register.

There are 2 main Acts of Parliament that place a statutory duty on Landlords to ensure that the electrical equipment in their properties is safe.

1. The Consumer Protection Act 1987

2. The Health and Safety at Work etc. Act 1974

The Consumer Protection Act affects all persons who let property in the course of their business because it defines them as “suppliers”, i.e. they are supplying goods to the tenant. There are several items of secondary legislation under the umbrella of the Consumer Protection Act that are directly relevant to the supply of electrical goods, including:

1. The Low Voltage Electrical Equipment Regulations 1989

2. The Electrical Equipment (Safety) Regulations 1994

3. The General Product Safety Regulations 1994

4. The Plugs and Sockets etc. (Safety) Regulations 1994

A failure to comply with the Electrical Equipment (Safety) Regulations 1994 and the The Consumer Protection Act 1987 is a criminal offence and may result in:

• A fine of £5,000 per item not complying
• Six month’s imprisonment
• Possible manslaughter charges in the event of deaths
• The Tenant may also sue you for civil damages
• Your property insurance may be invalidated

The Consumer Protection Act provides a defence of “due diligence” if it can be shown that the landlord or agent took all reasonable steps to avoid committing an offence – you will need documentary evidence of this.

The regulations are enforced by the Health & Safety Executive.

Although there is no statutory requirement to have annual safety checks on electrical equipment (PAT testing) it is advisable to have periodic checks done by a qualified electrician.

Electrical appliances and fittings within the property need to be SAFE and in good working order, but the legislation does not require the landlord to obtain a electrical safety certificate. However, if any electrical fittings or appliances within the property cause harm to a tenant the landlord/agent could be held liable.

Therefore in order to minimise the risk of something going wrong with the electrics landlords and agents are advised to make visual inspections and have periodic checks carried out by a qualified electrician. The landlord could also keep supplied appliances to a minimum, ensure that operating instructions and safety warning notices are supplied with the appliances and make sure that tenants know the location of and have access to the main consumer unit, fuses and isolator switch.

In January 2005 legislation under Part P of the Building Regulations made it a requirement that for certain types of electrical work in dwellings, plus garages, sheds, greenhouses and outbuildings to comply with relevant standards. It is therefore necessary to ensure that a competent electrician must carry out the work. For DIY electrical work you must belong to one of the Government’s approved Competent Person Self-Certification schemes or submit a building notice to the local authority before doing the work. Any Landlord, regardless of whether they see themselves as running a business or not, should look to comply with these regulations to ensure that all electrical equipment supplied is safe.

It should also be remembered that Houses of Multiple Occupation have their own electrical testing requirements.  The Management of Houses in Multiple Occupation (England) Regulations 2006 require that HMOs should have their fixed wiring tested every five years.  This applies equally to licensed and unlicensed HMOs.

Filed under: Uncategorized , electrical safety, regulations

LACORS on Cancellation of Contracts

On my weekly NFOPP email I was directed to this article on their website which mentions LACORS guidance on the Cancellation of Contracts Made in a Consumer’s Home or Place of Work Etc Regulations 2008.
Unsurprisingly LACORS takes the view that the Regulations apply to Estate (and presumably also Lettings) Agents.
What is more interesting is one of the scenarios in the guidance which we have reproduced here:

2.3.3 – During an estate agent’s visit to the consumer’s home, if the consumer has been able to review the information required by the Estate Agents Act 1979 and the Estate Agents ( Provision of Information) Regulations 1991 and then agrees to the quotation provided by the estate agent and says “Yes” to contracting with the estate agent for his services. The estate agent says “I’ll go back to the office and finalise the contract and send it through” – the Regulations are likely to apply as the contract is made following the offer made by the consumer. The estate agent needs to be careful to give the written notice of the right to cancel at the point the offer is made by the consumer.

This is an interesting view. LACORS is essentially saying that if a verbal agreement is made for business to commence then the notice must be handed over at that stage and cannot wait until the written contract is signed.
This is, of course, quite logical as a verbal agreement concluded on agreed terms is enforceable immediately and does not need to be reduced to writing. However, agents should take care and consider at what stage they are at with a landlord if they are talking to him face-to-face in his own home or place of work. If they are taking away from the meeting that they can immediately start marketing a property and can get th terms signed along the way then they should have handed over a cancellation notice and could potentially be liable to prosecution.

Filed under: Uncategorized , guidance, LACORS, regulations

Gas Safe Register

Boarding my train to London this morning I saw a poster campaign for the new Gas Safe Register. The successor to the old CORGI Landlords Gas Safety Certificate regime. While it is good to see promotion of gas safety, landlords and agents should make sure they are familiar with the new system and ensure that all their contractors are properly registered.

Filed under: Uncategorized , gas safety, regulations

New Gas Safety Regime

From 1 April 2009 CORGI will no longer be the official gas safety regulation body. The role will be taken over by the Gas Safe Register which is operated by Capita.

This has occurred because CORGI’s contract with the HSE came to an end and, while they tendered for a renewed contract, they were beaten by Capita who have promised a gradual reduction in the cost to gas engineers as well as an aggressive public awareness campaign.

From 1 April engineers must be registered with the Gas Safe Register to carry out work. Old CORGI registrations will not be valid. Engineers have had since January of this year to sign up with the new scheme so there will be no grace period.

From a landlord or agents point of view it is important to check that gas engineers that have previously been used are registered with the new scheme. All members will have ID cards and they can be checked either on the register website or by telephoning 0800 408 5500.

Current landlords gas safety certificates issued by CORGI engineers will remain valid, even if they expire after 1 April 2009 but on expiry they will have to be replaced by certificates conforming to the new scheme. After 1 April any certificate produced by an engineer not registered with the new scheme will not be valid.

A leaflet is available giving more information which also includes a picture of the new ID card.

The responsibilities and penalties as regards failing to have a valid certificate remain unchanged.

Filed under: Uncategorized , gas safety, regulations

Smoke Control in Wales

From 31 December 2008 the The Smoke Control Areas (Exempted Fireplaces) (Wales) Order 2008 has introduced certain exemptions to the Clean Air Act 1993 in Wales.

This allows that certain types of stove, mainly wood-burners are exempt from this legislation because they are particularly clean-burning.

From a landlord’s point of view it might be worth considering fitting one of the exempted stoves if refitting is being contemplated. In tandem with this it will be important to have a clause in the tenancy agreement to ensure that the tenant burns the appropriate fuel.

On a wider point where a property with a stove is being let it is important that a clause is inserted in the lease to specify the burning of the correct type of fuel. Many stoves are limited in what they can burn and will be damaged if the wrong fuel is used. It will be hard to make a claim for what is an expensive item if such a clause has not been inserted.

Filed under: Uncategorized , regulations, Wales

Cancellation of Consumer Contracts

Under the Cancellation of Contracts Made in a Consumer’s Home or Place of Work Etc Regulations 2008 new restrictions were imposed on certain types of contract from 1 October 2008.

The regulations do not apply to tenancy agreements but they do apply to agent’s terms of business with landlords. The regulations only apply where the contract is concluded (ie. signed) in the consumer’s home or workplace with the agent present. If they are mailed out and back or signed in some other place then the regulations will not apply.

Contracts that are made in the consumer’s home or workplace are able to be cancelled within 7 days of being made. Agent’s can seek reimbursement of any costs they have incurred provided that the consumer has agreed in writing but there is no right to claim any form of fees.

Contracts that fall under the regulations must include a notice setting out the consumer’s right of cancellation and failure to provide this is a criminal offence punishable by a fine of up to £5,000. In addition, clauses in the agreement will not be enforceable until such notice is given.

PainSmith Solicitors are able to supply copies of such notice on request.

Filed under: Uncategorized , regulations