The Distance Selling Regulations and the Cancellation of Contracts Made in a Consumer's Home or Place of Work Regulations are to be repealed in June 2014. However, the obligations have not disappeared, they have been re-enacted in a slightly different and consolidated form as the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.

This is part of the process of bringing into full force the EU Consumer Rights Directive which has been done on a piecemeal basis in the past. Given that the directive dates from 2001 the Government has not exactly rushed on this! Annoyingly the government has to a large extent simply copied the directive out into a regulation. Given that EU directives are (as the name implies) directive and therefore not very detailed this is not an entirely helpful approach to take. There is guidance on how the regulations are viewed by government but that also has its gaps.

The new regulations are substantially more onerous as they deal with "on premises" and "off premises" contracts. On premises contracts are ones concluded entirely in the business premises of the trader. An off premises contract is one concluded off the trader's premises in the physical presence of trader and consumer or one concluded on the trader's premises either based on an offer made off the trader's premises or after the trader addressed the consumer off the premises or after an excursion aimed at sellign teh service to the consumer. A distance sale is also still relevant and deals with organised distabce selling schemes without the presence of either party in the same place.

You can immediately see that a large number of contracts dealt with by letting and estate agents will be off premises as they will involve and offer or conclusion away from the trader's premises or an excursion (ie a property viewing) that was intended to sell the service or product.

However, there is an exception which states that residential letting are exempted so tenancy agreements are not covered. It is not clear whether that also means that guarantee agreements are not covered but there is case law which would suggest that they are not. But estate and letting agency service agreements with vendors and landlords do appear to be covered and the guidance also explicitly states that they are intended to fall within the regulations.

What Changes?

Well the scope of the regualtions are enhanced and they will probably end up applying to all letting and estate agency terms of business. The regulations allow for a 14 day right of cancellation and also have specific requirements as to the information that must be given. For most agents the basic information requirements will be satisfied if they have a decent terms of business in place. Those agents operating with more basic documents might wish to reconsider them. However, there will also need to be more specific information about the right to cancel given to all consumers and this will affect more lettings agents who do not usually find themselves dealing with this so much as estate agents do. As with the current position it is possible for a consumer to request early action in which case the right to cancel is not lost but the cost of the work done to date will have to be paid.

Summary

Agents need to review their terms of business and procedures again. Failure to comply with the regualtions can lead to prosecution. More crucially though, if the right to cancel information has not been properly given a consumer can cancel the contract at any time until it has been given or until the service has been fully provided and they will not be obliged to pay for that service at all. That could lead to some agents providing their service for free in the worst cases.

The change happens on 13 June 2014. Any contract made after that date will need to comply with the new regulations.