Tenancy contract guidance

THE OFFICE of Fair Trading has produced guidance on how the Unfair Terms in Consumer Contracts Regulations apply to tenancy contracts.

The OFT receives more than 200 complaints every year about unfair terms in standard tenancy contracts such as financial penalties, exclusions of the landlord’s liability for repairs and unfair termination and eviction clauses.

The guidance on standard tenancy contracts is a revision of that published in 2001. It is updated to reflect enforcement action taken by the OFT, court judgements and recent experience in dealing with tenancy contract complaints.

It outlines why some standard contract terms used in tenancy agreements are considered to be potentially unfair and includes examples of terms thought to be unfair along with possible ways of revising them.

Examples of unfair terms include those that exclude or limit the landlord’s liability, such as by transferring the landlord’s legal obligations to the tenant or imposing excessive penalties on tenants for failure to meet the terms of the contract, such as by charging excessive rates of interest on late payments of rent. Other examples are terms that enable the landlord to vary the terms of the contract, to impose new rules on the tenant or to increase the rent at short notice.

The OFT’s Annual Plan for 2005-2006 identifies the construction and housing markets, including the markets for related services, as a priority theme for action.

Sir John Vickers, OFT chairman, says: “Rented accommodation provides homes for millions of people in this country. It is important tenants have clear and fair contract terms so they know what their rights and obligations are under the lease.”