Students lose the upper hand signing tenancies

Posted by Tom Walker in

June 2014 saw the Consumer Contracts Regulations supplant the previous Distance Selling Regulations - regulations that were originally drawn up to protect consumers who purchased goods and services or entered into contracts without being physically present. For students, this change has seen the balance of power shift towards agents, landlords and universities when it comes to signing contracts for residential lets.

Under the old Distance Selling Regulations regime, students who signed their contracts online or by post (therefore meeting 'distance selling' criteria) had the legal cover to exercise the right to cancel their tenancy contract within 7 days of signing it - the so called "cooling off period" - without any repercussions. However, the new Consumer Contracts Regulation has carved out residential lets from its mandate, thereby removing this previous "cooling off period" protection previously granted to the likes of students.

It appears that under the Distance Selling Regulations, tenants grew wise to, and began abusing, the extra protection granted to them (by signing multiple tenancy contracts to keep options open for 1 week) to the extent that the powers that be determined this protection to no longer be in the interests of the public. As a result, under the Consumer Contracts Regulations, students signing contracts (including ASTs) electronically are no longer granted any additional protection compared with their peers who choose to sign tenancy contracts in person.

University expert Ella Stephenson of Pinsent Masons explains that universities allowed students a "cooling off period" of these seven days because "often accommodation agreements had been formed at a distance, by post, email or online." However, under new regulations, signing online is treated the same as in person; therefore students can no longer sign multiple online and then pull out. She believes that, "the government, correctly in our view, argued that the effect of this was to clog up the residential lettings market."

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