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Trading Standards advises letting agents on consumer protection regulations

Jim Fraser from Trading Standards considers the need for letting agents to provide important information about protecting deposits to tenants from a consumer rights perspective.

Misleading Omissions and Tenancy Deposits

It is vital that consumers are equipped and enabled to make informed decisions when dealing with traders, and this is particularly important in relation to the private rented sector.  The payment, handling and returning of tenancy deposits is a key concern for tenants and providing clear information facilitates good relationships between tenants, letting agents and landlords.

The Tenancy Deposit Schemes Regulations (NI) 2012 (enforced by local Environmental Health officers) have assisted tenants in safeguarding their security deposits. They also provide tenants with confidence that there are proper procedures in place for allowing them to get their deposit back at the end of the tenancy including dispute resolution mechanisms. 

Consumer Protection from Unfair Trading Regulations 2008

The relevant legislation to consider is the Consumer Protection from Unfair Trading Regulations 2008 (CPRs) which cover commercial practices between traders and consumers across a wide range of trading activities, including the private rented sector.

With regard to the private rented sector, the CPRs would consider

  • that the tenant is a consumer;
  • that the letting agent would be considered to be a trader in all circumstances;
  • and that a landlord may be considered a trader when dealing with a tenant, and may be considered as a consumer when dealing with a letting agent. 

The CPRs prohibit traders from using unfair commercial practices in their dealings with consumers and it is a criminal offence to breach these prohibitions. These unfair practices include misleading omissions, which will be the focus of this article. 

Misleading omissions

The prohibition on engaging in a misleading omission places positive obligations on letting agents to provide material information to tenants.

Material information includes informing a prospective tenant of the requirement to protect tenancy deposits and provide prescribed information in compliance with the Tenancy Deposit Schemes Regulations (NI) 2012 where it impacts on the tenant’s transactional decision.  This misleading omission prohibition in the CPRs focuses on what has not been said by the letting agent:

  • Omitting material information e.g. a letting agent fails to tell the tenant that their deposit must be protected in an approved tenancy deposit scheme;
  • Hiding material information e.g. small print in the tenancy agreement ;
  • Providing it in a manner which is unclear, untimely, ambiguous or unintelligible. e.g. failing to inform the tenant of the tenancy deposit requirements before a tenancy agreement is signed.

Therefore, it is different to a misleading statement under the CPRs, for example, a letting agent telling a consumer that the deposit has been protected when it is has not been.

Material information

Material information is information which the consumer needs to know.  The Trading Standards Service considers the requirements of the tenancy deposit regulations to be material information. 

Therefore, letting agents should provide details about protecting tenancy deposits and any relevant scheme before the tenant agrees to enter the tenancy and this information should be presented in a clear and transparent manner to the tenant. For example, it may be appropriate for the agent’s website or any advertising materials to explain how a deposit will be protected, what information will be provided and how the deposit will be returned.   

Given the benefits provided by the protection of tenancy deposits in approved schemes, a tenant should use a letting agent who informs them of the deposit scheme requirements and ensures that deposits are properly protected.  It may also impact the decisions of the tenant at the end of the tenancy when seeking the return of the deposit and asserting their rights. 

Professional diligence

The Tenancy Deposit Regulations place the responsibility on the landlord to register the deposit with an approved scheme. However, where a landlord has used a letting agent, it is the letting agent’s responsibility to ensure that the deposit is properly protected.

The CPRs further prohibit traders (letting agents) from contravening the requirements of professional diligence. It is not sufficient for a letting agent to tell a landlord that the deposit should be protected and to assume that the landlord has carried this through, or to have relied on oral assurances from a landlord that the deposit has been placed within a scheme. The agent should make reasonable checks to ensure that deposits have been protected in an approved tenancy deposit scheme and keep and/or request relevant records and documentary evidence.

Tagged In

Private Tenancies, Landlord

This article was written on 12 August 2015. It should not be relied on as a statement of the current law or policy position. For help with housing issues please contact our helpline on 028 9024 5640 or use our online chat service at www.housingadviceNI.org.