THE CANCELLATION OF Contract Regulations (CCRs) came into force in October 2008, but there is still a lack of understanding of their implications. Trading Standards enforce the regulations and any offence carries a fine up to £5,000.

The regulations are clear. If the contract to engage an agent’s services is signed by the consumer away from the agent’s premises, there is a seven day cancellation period in which the consumer can decide not to proceed. Cancellation rights still apply where the consumer enters the contract as a result of the visit but signs at a later date. The regulations apply to sales and lettings agents where contracts allow them to sell a property or find a tenant and/or let a property.

When the contract is made, the agent must give the consumer written notice of their right to cancel within the cooling off period. Regulation 7 of the CCRs specifies the information that must be in the notice:

• the identity of the trader including trading name (if applicable)
• the trader’s reference number, code or other details to identify the contract
• a statement that the consumer has a right to cancel and that this right can be exercised by delivering, or sending (including email) a cancellation notice to the person mentioned in the next paragraph at any time within the period of seven days starting with the day of receipt of a notice in writing of the right to cancel the contract
• the name and address, (email and postal) of whom the customer can give a cancellation notice
• a statement that notice is considered to be given as soon as it’s sent
• a statement that the consumer can use the cancellation form provided

The notice must have a detachable section for the consumer to return to the agent should he decide to cancel. No agent may contract out of these regulations so it is vital to ensure that the provisions are understood and complied with. There should be no penalty for exercising this right. A consumer may cancel the contract at any time within seven days, using the (provided) form or a simple written notice, as long as their intentions are clear. As long as it has been posted or emailed within seven days, it does not matter when it is received.

One seller contacted us explaining that she had signed a contract in her home to sell it, without realising the full implications. The contract was signed with an agent on a Tuesday afternoon, with a seven day cooling off period. She decided to cancel and notified the agent by email on the morning of the following Tuesday. The agent argued her cancellation notice was issued on the eighth day and held that the contract stood. I agreed with the agent as the ‘cancellation period’ was seven days from the date the consumer received the notice. In another case, the seller sent the notice to cancel on the seventh day, received by the agent on day eight. The agent insisted that notice was given after the cancellation period – this was not the case, notice was served on the seventh day.

Does Schedule 3 of the Regulations provides exemption for agency agreements? This schedule stipulates that the regulations do not apply to contracts for the sale or rental of property. To be clear, a contract for the sale or let of a property, (the agreement made between seller and buyer or landlord and tenant), is exempt under Schedule 3. The agency or letting agreement relates to the provision of services, not to the actual sale or let of a property, so it’s not exempt from CCRs.

Take notice. The ombudsman for property, Christopher Hamer, calls for compliance on the Cancellation of Contract regulations.”

In disputes, I will not rewrite a contract if properly performed. In one case, the complainants, (sellers), wanted a determination on whether the agency agreement complied with the CCRs. The notice was in the contract but the cancellation clause had been struck through with: ‘Not Applicable.’ The agent’s explanation displayed a worrying lack of understanding, arguing that by deleting the clause, they gave the complainants the opportunity to cancel at any time during the 26 week agency period, rather than just the first seven days! However, the complainants had not attempted to cancel the agreement and had not been disadvantaged by the possible failure of the agreement to be compliant. I considered it reasonable to conclude that a contractual relationship was agreed. The agent’s buyer proceeded to exchange of contracts and (only) then the complainants queried the validity of the contract.

In summary, care should be taken to ensure that all contracts comply with these provisions. If an agent has any questions, they should speak to their local Trading Standards Office.