For the last 6 years most consumers had a 7-day cooling off period when they instructed an agent to sell or let their property. As of Friday 13th June, this period will be doubled to 14 days.
But be warned, the new regulations are complex and the increased cooling off period is not the only change.
The new regulations have provisions that apply to all agents' contracts, including those agreed on-premises' as well as those agreed off-premises'. They also apply to those agreed online. A host of statutory information must now be provided in the contract, regardless of whether or not a cancellation right applies. The omission of this statutory information creates the potential for a prosecution by Trading Standards Officers, with a maximum fine of £5,000.
The 14-day cancellation rights change applies to all off-premises' contracts agreed whilst the client was not in the agent's office. These rights also apply to some contracts that are agreed in the office. Full details of the cancellation right must be provided in the contract in the manner set out by the regulations.
Where the statutory cancellation rights information is not provided within the contract, the consumer's cooling off period is extended significantly. The period is extended to 14 days from the date the written cancellation rights information is provided. If it is never provided, the consumer will have a twelve and a half months cooling off period! I will repeat: a 12 months cooling off period.
In those cases, agents, who may well provide a good service and sell or let the property, can try to obtain their fees, but legally they will have no entitlement to any fee whatsoever!
The regulations also specifically prevent agents from marketing a property within the 14-day cooling off period, unless they obtain a specific written instruction from the client. The risks of not obtaining this consent appear at first glance to be minimal. However, agents should be clear that if you do find a buyer or a tenant within the cooling off period, the client will be legally entitled to cancel the contract and have no liability to pay your fee or any part of it.
The upside is that if agents get it right and ensure the correct clauses are incorporated within their contracts, they will be able to impose charges on clients in the event of a cancellation. In some cases the full fee may be payable, if the ultimate buyer or tenant is found within the cancellation period.
Additional information can be found here: https://www.compliance-matters.co.uk/wp-content/uploads/2014/05/cancellation-advice.pdf
*David Beaumont is a Trading Standards compliance consultant working with estate and letting agents all over the UK
Comments
This is probably the most important piece of information on this site for agents in months! The lack of comments speaks volumes about the awareness and interest of many agents. Don't start moaning if you have not checked your TOB's!