Cooling-off periods are being extended from seven days to 14, from June 13, and agents will need to change their contracts by then in order to be operating legally. While the changes will widely apply to all sales agents, letting agents should note that they are also likely to be caught.
The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 will come into effect, replacing previous legislation on distance contracts. Directives on unfair contract terms will remain in place.
The new cooling-off period means that agents will have to give sellers 14 days in which they can change their mind, without penalty, about instructing them.
This applies, as before, only when the contract is signed at a location away from the agent’s business premises – usually, the selling property. It is estimated that 80–90% of all contracts are signed in the sellers’ homes.
The seller must be given clear notice, in writing, which states their right to cancel within the 14-day period.
Importantly for those agents who give the vendor the option to sign away the right in order for agents to begin work immediately, consumers will nevertheless have the right to cancel a service which has begun within the cooling-off period.
So, for example, a vendor who has, in writing opted out of the cooling-off period might change their mind a week later, and is entitled to withdraw from the contract.
In these circumstances, you would be entitled to be paid for services performed up to the point of cancellation – for example, an advert in the local newspaper.
It is possible that some agents will be caught by two other changes. Pre-ticked boxes will be banned by the new Euro directive. So, for example, if you offer extra services, you must give the seller the opportunity to actively opt in. Pre-ticked boxes will be banned across the EU.
There will also be a ban on hidden fees and charges: the total cost of your service must be fully spelled out. Customers will not have to pay extra charges if they were not properly informed in advance.
Agent Simon Bradbury, a partner at Thomas Morris in Cambridgeshire, said he thought there will be three important implications for agents.
“First, they will have to amend their contracts,” he said.
“Secondly, these are very challenging times for agents to get new listings, and the current seven-day window in which another agent might get a vendor to switch the instruction is being doubled to 14 days. That means agents who have won instructions are more vulnerable to losing them.
“Thirdly, however, the converse is true: agents now have twice as long to go after winning a new instruction off a rival.”
Matthew Pryke, of law firm Hamlins LLP, said that letting agents will also be caught by the 14-day cooling-off period if they contract to provide services around the actual lettings agreement – for example, inventories.
Pryke said: “The 14-day change is coming in quite quickly and quite a few industries are being caught out.”
Thanks for the alert on this.
Do we have any idea how many people do ‘cool off’ within the existing seven days? And how many ‘opt out’?
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We have already implemented the 14 day cooling off period into our agreements to stay ahead of the curve. We have seen a very nominal effect on our listings. Ultimately, if the vendor accepts the services during that time then any fees applicable will be come payable…… or so our solicitors see it!
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A major problem for Lettings will be when tenants need a guarantor! Often they sign Deeds of Guarantee at a distance so what is to stop them cancelling AFTER the tenants have moved in?
What of tenants who, for whatever reason, sign the AST at the property? They can then move out within 14 days? Another example of ill-thought out legislation being introduced without consultation.
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Hi…
I signed a contract (8th Oct) with Kings-Group to sell my property. This was done at home. There were two signatures; the first was to agree to terms and the second, as I was told, was to get the property to market straight away. I have now been told the second signature waived my right to cancel!
I had a couple of issues one of which was to replace the boiler and also a little disagreement with my other half whether to sell or re-mortgage. I emailed Kings-Group to cancel (10th Oct). They confirmed that my request to cancel had been accepted. At no point was I told I couldn’t cancel.
I managed to convince my partner to sell. We decided to get a second valuation which we did with Lanes and subsequently listed with them to sell. Kings-Group have since emailed and sent letter to say they will be pursuing 1.5% plus VAT of the sale price as I had waived my cooling off period with the second signature.
Are they right. Can they have me waive my right to cancel within the 14 days. They did not tell me this was what I was signing for. What can I do?
Please help.
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