Out-Law / Your Daily Need-To-Know

Change in consumer law gives universities student accommodation leeway

Out-Law News | 18 Aug 2014 | 2:28 pm | 1 min. read

Universities will no longer have to allow students to cancel accommodation places at short notice without penalty. A change to consumer protection laws makes it clear that certain regulations do not apply to residential lettings. 

In June the UK's Distance Selling Regulations were replaced by the Consumer Contracts Regulations (31-page / 285KB PDF) In the past, universities generally acted as though rental accommodation was caught by the old law, the new one explicitly states that it does not cover residential letting.

That prevents students effectively 'holding' several accommodation options open and cancelling all but their first choice at short notice, said universities expert Ella Stephenson of Pinsent Masons, the law firm behind Out-Law.com.

"When allocating student accommodation universities generally complied with the Distance Selling Regulations and gave students a cooling off period of seven days in which they could cancel any accommodation agreement," said Stephenson. "This was because often accommodation agreements had been formed at a distance by post, email or online and, even though the position had never been tested in the courts, there was a risk that Distance Selling Regulations could apply to such agreements."

"One of the reasons that the government chose to expressly carve out residential lettings from the scope of the Consumer Contracts Regulations was the potential for abuse by prospective tenants of their cancellation rights, in that tenants could place a number of properties on hold in the comfort that they could cancel their less favoured tenancies if they got a better offer," said Stephenson. "The government, correctly in our view, argued that the effect of this was to clog up the residential lettings market."

"This is welcome news and means that university estates teams no longer need to burden themselves with this extra layer of consumer compliance and regulation," she said.