Free credit checking services contravening Tenant Fees Act?

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    Free credit checking services contravening Tenant Fees Act?

    The TFA 2019 states a landlord must not require a relevant person to enter into a contract with a third party in connection with a tenancy of housing in England if that contract
    is a contract for the provision of a service. Can a landlord insist a tenant signs up to a FREE credit checking service? (the legislation says nothing about a payment being made for the service)

    #2
    We'd need some kind of test case, but I think it's a contract, even if it's free.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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      #3
      I wonder if this law is going to come and bite one of us when our tenant refuses to engage with utility providers, citing the above law?

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        #4
        Originally posted by JK0 View Post
        I wonder if this law is going to come and bite one of us when our tenant refuses to engage with utility providers, citing the above law?
        There are conditional exemptions for utilities: http://www.legislation.gov.uk/ukpga/...raph/9/enacted

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          #5
          Originally posted by leaseholder64 View Post

          There are conditional exemptions for utilities: http://www.legislation.gov.uk/ukpga/...raph/9/enacted
          That's a relief... (unless you forget to put in the tenancy agreement that tenant has to pay the gas bill.)

          Comment


            #6
            Originally posted by jpkeates View Post
            We'd need some kind of test case, but I think it's a contract, even if it's free.
            Thank you for the response - yes this is my thinking. Perhaps it comes down to whether creating an account online, agreeing to certain conditions and providing certain information may constitute a contract but what is the consideration?

            Comment


              #7
              Originally posted by cymro123 View Post
              but what is the consideration?
              That's why I'm thinking it would be some kind of test case, because signing up to a free service may not be a contract per se.

              However, joining it undoubtably imposes some kind of obligation or performance on the tenant (otherwise why offer the service) and consideration doesn't have to be money.

              There are fairly tight controls on the use of credit checking data. When you submit a landlord credit check, you don't get a lot of information back, just the score, a recommended course of action and stuff that's a matter of public record. The agencies who do credit checks are very careful not to reveal the source data, because they're given it in confidence. Getting the level of detail you'd see when you asked a prospective tenant to open up their full record would be unusual.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                I would have thought that "Sign up for this particular service or I won't even think of renting to you." would be enough to count as a consideration/term that would make it a contract?

                You would be requiring them to use a particular third party for the provision of a service.

                If you could give them a choice of free checking services to use then that might be a way around that?

                Once again, remember that credit ratings were never really intended for tenant checking purposes.

                They were/are intended for credit and loan companies to decide who to lend money to or not.
                All that a high credit rating shows is that the person uses credit or takes loans and pays it back.
                A person who never uses a credit card and never takes out any loans will have a low (or even zero) credit score, that doesn't mean that they can't/won't pay the rent.

                For tenant checking purposes it's only if the credit check show defaults or CCJs that it should be an issue.

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                  #9
                  The "free" reference service must be getting something of value from some of its users, or they wouldn't be providing the service. The personal information provided in the signup may be valuable in itself, although the main value probably relates to targeted advertising, or commissions

                  Whether this is sufficient value to be consideration I'm not sure, although I think the personal information and email address might well be..

                  Comment


                    #10
                    My feeling is that a lot of landlords will be doing this.

                    Luckily, a 3rd party contract breach isn't a problem for s21 notices, so a superstrike moment is unlikely.
                    It's more an issue that someone prepared to try it on will turn up with a doctored report.
                    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                    Comment

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