The Office of Fair Trading has been more active than the CMA in this regard. Their most well-known case in the private rental sector (which focused on extension clauses in lease agreements with landlords) is the case of Foxton. The rules for abusive clauses differ slightly depending on when your contract started. If the contract commenced before October 1, 2015, the contract will be reviewed pursuant to unfair clauses of the Consumer Contracts Regulations 1999. Clauses negotiated individually between two parties cannot be unfair under these rules, so not all the terms you and the owner have added to the basic contract are verified by commercial standards. Include all the terms in the main document. Don`t refer to other documents or use small print to add a term at the end. If you are an owner or broker, we offer many types of leases, including ASTs, without unfair terms within it. You can find the documents here. A landlord cannot increase the rent for the duration of the temporary tenancy (usually the first six months). On October 21, 2003, the High Court ruled, in accordance with the Office of Fair Trading, that unfair clauses in consumer contracts (UTCCR) applied to leases and other contracts related to land transfer. Both the 1999 Regulations on Abusive Clauses in Consumer Contracts and related Government Guidelines have been adopted to transpose the Council`s Directive 93/13/EEC on Abusive Clauses in Consumer Contracts into UK legislation.
The European Court of Justice (ECJ) issued a preliminary ruling on the interpretation of the directive in a case involving unfair penalty clauses for unpaid rents that did not reflect the actual loss to the landlord. The ECJ has established the following principles: All professionally developed leases are now developed on this basis. As a general rule, the consumer has no say under these conditions and will often sign them without even reading them. The rules on abusive clauses, which stipulate that clauses must be “fair”, are an attempt to restore balance to prevent consumers from being exploited unjustifiably. If the rental agreement contains a rental price verification clause, the tenant has already agreed to increase. However, they must be fair. How do these rules apply to leases? In essence, the regulations do not apply to the fundamental concepts that, in the case of a lease, would be: the purpose of the regulation is to protect consumers from the aggressive trading conditions created by lawyers working for the companies. Although it is now quite old, the OFT guide is still the best we have and should be read by all those involved in the development of leases.
The regulations require that they go to the lessor or agent concerned (if they learn of abusive clauses) and require that they agree to change the insulting conditions.