Competition and Markets Authority looks at using 'consumer protection powers to assist' PRS tenants and landlords to understand their rights and obligations

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The CMA, one of whose purposes is to tackle unfair market practices, has been investigating the private rented sector and has raised concerns about the functioning of the PRS in a recent report this month.

Noting ONS figures (from June this year) stating that 35% of UK adults currently found that it was difficult to afford their rent or mortgage payments the CMA said "There is currently widespread concern about how well various aspects of the housing market are working .... we are determined to ensure that ineffective competition or unfair business practices are not increasing costs, limiting choice or reducing quality .... We have carried out a process of wide ranging stakeholder engagement to understand better the consumer protection issues that may be facing people when they rent a property."

Underlining this, the CMA went on to say that the private rented sector is "a complex regulatory area spanning several different areas of government policy such as energy, tax and housing standards. Housing policy is largely devolved, with differing legislative frameworks, differing regulatory requirements for those trading in the sector, and different legal systems with different litigation processes for the resolution of disputes. Local authority enforcement differs across the four nations."

Whilst these may seem, to tenants and landlords as well as agents (not to mention local authority officers), to be understatements, the CMA points out that it needs "to consider whether the issues .... are within the scope of our consumer protection powers and whether, if the CMA is well placed to take action, we should investigate further."

One of the biggest issues highlighted by the CMA was the lack of understanding by both tenants and landlords about their respective rights and obligations and they point out that the consensus is that tenants find it hard to "exert their rights against landlords, despite the existing statutory and contractual protections that are in place."

The report (which is also based on feedback from stakeholders such as Crisis Uk and the National Residential Landlords Association, amongst others) gives an overview of the PRS, the consumer protection legal framework and enforcement thereof and the key issues faced by consumers in the PRS before going on to its conclusion and laying out the next steps that the CMA will be looking to take.

Possibly, one 'take away' for the everyday landlord is that the ecosystem that they operate in means that they are involved in a commercial "business" that is "trading" in the provision of a necessity. This means that they'll be governed by principles of public safety and consumer 'protection' and, where those principles are concerned, there's no such creature as so called 'passive income'. Getting these ducks in a row before letting out a property is essential to being able to cope with the vagaries of the landlord/tenant contractual relationship. Any future CMA guidance/code of practice will go some way to helping both landlords and their tenants get their heads round this complexity.

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