June 2014 Newsletter

Published on Monday, 02 June 2014.

June 2014 Newsletter

Welcome to the June 2014 TPO Newsletter

This edition has a special focus on regulation to reflect the new Consumer Contracts Regulations 2013 (CCRs) that come into force this month. New regulations such as these and many other primary and secondary legislation changes are reflected in TPO's new Codes of Practice for Sales and Lettings, which have been updated to include the latest industry best practice.

Gerry Fitzjohn, Vice Chairman, TPO Board.


This month we look at:
Bite-size best practice: Adhering to the new Consumer Contracts Regulations
New Codes for Sales and Lettings come into force from August 2014,
TPO receives Government approval to provide lettings redress.


Bite-size best practice: Adhering to the new Consumer Contracts Regulations

We've produced a bit-size best practice update to highlight the impact of the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCRs) that come into force this month.

This article includes bullet-point actions to help members adhere to the new regulations to minimise consumer disputes and TPO Code breaches.

Who do the CCRs affect?

All agents will be affected by CCRs – they apply to all businesses with consumer contracts offering services made on-premises (e.g. in branches), made at a distance (including online sales) and off-premises (e.g. in a client's home).

What do the CCRs replace?

The new regulations will replace the Consumer Protection (Distance Selling) Regulations 2000 and the Cancellation of Contracts made in a Consumer's Home or Place of Work Regulations 2008.

When do CCRs come into force?

CCRs will apply to all contracts agreed on and after 13 June 2014.

What steps can I take to ensure I'm compliant?

Brief your staff and update your contract paperwork to ensure it complies with the guidance below:

  • Service contracts: the 'Cooling Off' cancellation period for all service contracts must be extended from 7 calendar days to 14 calendar days. Note: no reason has to be given by the consumer to cancel the contract during this period
  • Ancillary contracts: if a consumer cancels their contract, the new regulations require any ancillary contracts to be automatically cancelled, e.g. rent guarantee insurance
  • Reclaiming money spent: If you wish to claim a fee to recover money spent marketing a property during the 14 day cancellation period, you must ensure these costs are set out clearly and prominently in the service contract, and gain the consumer's express permission to start work during that period. Fees must be reasonable, reflect actual costs and not include any element of penalty.
  • Refunding client money: You must pay any refund of monies due to a consumer within 14 days of a contract being cancelled to avoid breaching the CCRs.

Did you know?

  • If you complete the service within the cancellation period, the consumer's right to cancel is lost e.g. tenant find only service.
  • It remains a criminal offence not to inform a consumer buying off-premises of their cancellation rights.
  • You must inform the consumer of your TPO membership and disclose the appropriate TPO Code of Practice at the outset.
  • CCRs do not apply to the agreement between the seller and buyer to purchase the property or the tenancy agreement between the landlord and tenant.
  • Consumers will not be liable for costs which they have not been told, pre-contract, that they must bear (e.g. marketing costs, if those costs were not 'prominent' and transparent in the contract)
  • Schedule 3 of the CCRs provide model instructions for the appropriate cancellation notice to be provided by the trader and a model cancellation form for consumer use.

How do I find out more?

The Department for Business, Innovation & Skills has produced a number of materials that are published on the link below, under 'detail' and 'latest': www.gov.uk/government/policies/providing-better-information-and-protection-for-consumers/supporting-pages/implementing-the-consumer-rights-directive-2011-83-eu


New Codes for Sales and Lettings come into force from August 2014

TPO has made several important changes to both the Code of Practice for Residential Letting Agents and Residential Estate Agents. The updated Codes will be effective from 1 August 2014 to reflect the latest industry best practice and legislative changes.

TPO's Codes of Practice are unique in the industry and provide a set of standards and guidelines for members to follow that comply with all primary and secondary legislation.

The Codes are a tool for member agents to use as a 'mark of excellence' above their non-member industry peers to reassure buyers, sellers, tenants and landlords about the service they can expect to receive.

Key actions for all TPO sales and lettings agents:

  • Copies of the updated Codes of Practice and the TPO Consumer Guide should be made available in all your offices.
  • Hard copies will be available to order through the This email address is being protected from spambots. You need JavaScript enabled to view it. at the end of this month.
  • Please ensure all members of staff are made aware of the changes so they are fully conversant with all aspects of the Codes and have good working knowledge of the law of agency.

 

Sales agents: Amendments to the Sales Code of Practice:

  • To view the updated Sales Code please click here.
  • Key changes: several important amendments and new sections have been included in this edition concerning a wide range of topics, such as:
    • (Section 1e) General Obligations: A new form of words has been included so all agents understand their legal obligation to provide equal treatment of buyers and sellers, regardless of their race, religion or belief, sex, sexual orientation.
    • (Section 5l) Duration and Termination: The extension of contract cancellation periods from the current 7 calendar days to 14 calendar days, in accordance with The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which come into force on 13 June. Further information and guidance can be found by clicking here.
    • (Section 9c) Offers: The Code now explicitly states that 'by law you cannot make it a condition of passing on offers to the seller that the person wanting to buy the property must use services offered by you or another party.'
    • (Section 10b) Financial Evaluation: A new section has been included to ensure agents understand that they 'must put all offers to your seller client even if the prospective buyer has not been financially qualified at that stage.'
    • (Section 18) Glossary of Terms: This section includes several new additions and updates to clearly define terms such as 'aggressive behaviour' (with illustrative examples to highlight where the average consumer's freedom of choice could be impaired), what is meant by the 'average consumer' - what small print they should be expected to understand and how a consumer's behaviour is influenced by the information an agent provides. The updated Glossary also has updateddefinitions for 'harassment', 'material information' and 'transactional decision'.
  • TSI logo: The updated Sales Code's front page also includes the Consumer Code Approval Scheme logo to highlight the Code's approval by the Trading Standards Institute (TSI), which replaced the replaced the Office of Fair Trading (OFT) scheme last year.*

 

Lettings agents: Amendments to the Lettings Code of Practice:

  • To view the updated Lettings Code please click here.
  • Key changes: several important amendments and new sections have been included in this edition concerning a wide range of topics, such as:
    • (Section 1e) General Obligations: A new form of words has been included so all agents understand their legal obligation to provide equal treatment of landlords and tenants, regardless of their race, religion or belief, sex, sexual orientation.
    • (Section 2) Duty of Care and Conflicts of Interest: This new section highlights the steps agents must take to avoid a potential conflict of interest.
    • (Section 5f) Instructions and Terms of Business: The extension of contract cancellation periods from the current 7 calendar days to 14 calendar days, in accordance with The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, which come into force on 13 June. (Further information and guidance can be found by clicking here).
    • (Section 5j) Fair Contracts: The updated Code makes specific reference to renewal fees and the agent's responsibility to communicate the liability to the landlord.
    • (Section 5n) Fees and Charges: This amendment highlights how agents must not charge the same service to more than one party in the same transaction.
    • (Section 6) Lettings Boards: This section has been expanded to include more detail and to cover topics such as multiple occupation properties and the importance of agents adhering to local legislation.
    • (Section 7) Published Material and Information about a Property: This section emphasises the compliance requirements of the Consumer Protection from Unfair Trading Regulations 2008 and also highlights disclosing non-optional fees as per the Committee of Advertising Practice guidelines.
    • (Section 22) Glossary of Terms: This section includes several new additions and updates to clearly define terms such as 'aggressive behaviour', 'average consumer', 'harassment', 'material information' and 'transactional decision'.

Please use the information above and supporting documentation to brief your teams so everyone can continue to use the Codes to demonstrate their commitment to treat consumers with fairness and integrity at all times.

* Please note: TPO's TSI approval only applies to the Sales Code at present and restrictions apply to the usage of TSI logo(s). Agents can no longer display the OFT logo under any circumstances - any breaches of this would be considered misleading to consumers and a potential criminal offence.


TPO receives Government approval to provide lettings redress

The Department for Communities and Local Government has approved The Property Ombudsman (TPO) to provide a free and independent redress service to landlords and tenants as part of new legislative changes announced by Housing Minister Kris Hopkins that will require all letting agents and property management agents in England to register with a redress scheme later this year.

As the UK's largest property redress scheme, TPO operates an independent dispute resolution service for member agents and consumers. More than 11,000 lettings offices have already voluntarily registered with TPO and follow the scheme's unique Code of Practice.

TPO is the largest and longest-running property dispute resolution service – specialising solely in property redress. Our 24-years' experience is a testament to the knowledge we have on all things property-related to review complaints fairly and independently.

Your TPO membership will ensure you are fully compliant with the provisions of the Enterprise & Regulatory Reform Act and with more than 60% of UK letting agents already registered with TPO, we're proud of the transparent fee structure we've maintained to ensure there are:

  • No case fees
  • No hidden charges
  • Flexible membership terms: Agents can follow one or more of TPO's Codes of Practice for no additional fee

As the only redress scheme offering agents a Code of Practice to raise standards in the industry, TPO agents have a unique point of difference to promote peace of mind among buyers, sellers, landlords and tenants about the service they can expect to receive.

We will keep members informed of future developments on the legislation's implementation.

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