Letting agents and the law on unfair terms in contracts with landlords

With the Renters’ Rights Act having banned fixed term periods in tenancy agreements and adding considerably more complexity to letting property in England, many letting agents have revised their terms and conditions and also how they price services for landlords.

However, it is important from both a legal and an ethical point of view that the terms in agency agreements are transparent and fair. Like any other business selling a product or service to consumers, letting agents do not have complete freedom to put whatever they like into contracts.

This is because the overwhelming majority of landlords are consumers in the eyes of the law, which means they benefit from consumer protection law in Part 2 of the Consumer Rights Act 2015, even if they do not benefit from the new protection for consumers in the Digital Markets, Competition and Consumers Act 2024.

Letting agents are also subject to the fiduciary obligations that agents owe to their principals under the law of agency, whether or not they are consumers.

This blog post not only explains how the law regulates unfair terms and practices on the part of letting agents, it also frames the issue by asking “what is a fair approach for letting agents to take”.

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The fiduciary relationship between agents and principals

Before we look at the specifics of how the Consumer Rights Act 2015 (CRA) and the Digital Markets, Competition and Consumers Act (DMCCA) regulate the relationship between letting agents and landlords, let’s spend a little time on the law of agency upon which everything is founded.

Under the law of agency, a principal authorises an agent to deal with third parties on their behalf, which includes entering into legally binding contracts with third parties.

In the leading Court of Appeal case of Mothew v Bristol & West BS (1996), Lord Justice Miller said (my punctuation):

It’s therefore important to appreciate that letting agents have obligations under the common law to act in good faith, not have conflicts of interest, and not act for their own benefit without the landlord’s “informed consent”.

The legal relationship between letting agents and landlords

With respect to the legal relationship between letting agents and landlords, the landlord is the principal who authorises the letting agent to act on their behalf with tenants and suppliers. This includes signing the tenancy agreement, receiving rent, and serving formal notices.

As discussed above, letting agents are fiduciaries in relation to the landlords they act on behalf of, and owe them the same fiduciary obligations as other fiduciaries such as a company director or a trustee.

Anything that the letting agent does for the landlord in the normal course of letting a property is binding on the landlord and is as if the landlord did it themselves.

A letting agent can even bind a landlord despite not actually being authorised, if it appears to the tenant that the agent has authority to do things on the landlord’s behalf. That is called “ostensible” or “apparent” authority.

When is a landlord a consumer under the Consumer Rights Act?

As well as the protection landlords receive as a result of agents’ fiduciary obligations to them, landlords benefit from consumer protection law in relation to unfair terms under the Consumer Rights Act 2025 if they are a “consumer landlord”.

Definition of a consumer in the Consumer Rights Act 2015

Section 2(3) Consumer Rights Act 2015 states that a consumer is “an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”. An individual means a human being, and not a legal entity, such as a limited company or a limited liability partnership.

Section 2(4) CRA requires the trader to prove if the individual “was not acting for purposes wholly or mainly outside the individual’s trade, business, craft or profession”, and not the other way around

What is a “consumer landlord” under the Consumer Rights Act?

A good rule of thumb is that an unincorporated landlord is likely to be considered a consumer if they have another job or profession, and won’t be a consumer if they’re a full-time landlord running a business providing rental properties.

The number of properties they have is not important; it’s whether being a landlord is their main business.

Importantly, landlords cannot be “consumers” for the purposes of consumer protection law if they own their properties through a limited company because only “individuals” (i.e. human beings) can be consumers. This is regardless of whether they have another job or only own one buy to let. The fact they used a limited company to buy the property disqualifies them from consumer protection.

The CMA’s 2014 Guidance for lettings professionals on consumer protection law advises that letting agents should “comply consistently with the requirements of consumer protection law when dealing with all landlords, unless the landlord is clearly a corporate entity or running a business that lets out many properties”. 

It was accepted in the OFT v Foxtons case that landlords could be consumers.

Note that landlords cannot be consumers for the purposes of the rules on subscription contracts in the DMCCA (see below).

Landlord protection in Consumer Rights Act 2015

The Consumer Rights Act 2015 (CRA) imposes a duty of fairness on all contract terms and notices in contracts between businesses and consumers.

Section 62 Consumer Rights Act 2015 says that unfair terms are not binding on a consumer. It’s unfair if “contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer”.

It doesn’t matter if the consumer signed a contract agreeing to the unfair terms; the business cannot enforce an unfair term in a contract with a consumer. Any ambiguity in wording would be interpreted in the consumer’s favour.

Landlords have protection as consumers under the CRA if they fall under the definition of consumer outlined above.

Terms in agency agreements must be even-handed and not unduly one-sided in favour of the letting agent. Terms must also be transparent, written in plain, intelligible language and presented clearly.

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The position for landlords under the DMCCA

Unlike the Consumer Rights Act, landlords do not benefit from the consumer protection rules in the Digital Markets, Competition and Consumers Act (DMCCA) as the definition of consumer excludes those who are carrying out an “undertaking for gain or reward”.

Do landlords have protection against unfair commercial practices in the DMCCA?

No, not when they are acting as landlords. Although Section 225 DMCCA bans “unfair commercial practices”, which are likely to cause the “average consumer to take a transactional decision that the consumer would not have taken” had it not been for the unfair commercial practice, the definition of “consumer” in the DMCCA does not extend to landlords.

This is because the definition of consumer is narrower in the DMCCA than the CRA. Whilst Section 225 DMCCA defines a consumer as “an individual acting for purposes that are wholly or mainly outside the individual’s business”, which is similar to the definition in the CRA, there is a proviso in Section 249 that states that a business includes both “a trade, craft or profession” AND “any other undertaking carried on for gain or reward”.

As landlords let properties for money, it is treated as a business under the new DMCCA, unlike in the CRA, and landlords do not have protection from unfair commercial practices when they are acting as landlords.

Even an accidental landlord with no experience in business who inherits their childhood home are not considered to be a consumer in the DMCCA. This is because the rent which a landlord receives from letting a property is a “gain”. It’s irrelevant here that the individual’s main job might be something else or that they only have one or two rental properties.

Do the DMCCA rules on subscription contracts protect landlords?

No. The definition of consumer in Section 280 follows that in Section 225 and includes “any other undertaking carried on for gain or reward” in the definition of business. Businesses do not benefit from the rules on subscription contracts in the DMCCA, and as landlords are considered to be running a business in the DMCCA, this means they don’t have consumer protection.

This contrasts to the considerably wider definition of consumer in the Section 2(3) Consumer Rights Act 2015 which defines a consumer as “an individual acting for purposes that are wholly or mainly outside the individual’s business”, without the qualification that “business” includes anything done for money or other reward.

Consequently, even an accidental landlord who only owns one property cannot benefit from the rules on consumer protection for subscription contracts in the DMCCA, for the same reasons as for the DMCCA rules on unfair commercial practices.

Therefore, if a landlord who would be a consumer under the CRA would not have protection under the rules on subscription contracts if they enter into property management or rent collection agreements, as the rules on subscription contracts in the DMCCA will treat them as a trader, not as a consumer.

However, landlords can still be consumers for the laws on unfair terms in the Consumer Rights Act.

It is vital that landlords read and make sure they understand the terms they are signing up for when they enter into an agreement with a letting agent that involves recurring payments. Although they may have the protection against unfair terms in the Consumer Rights Act, they will not benefit from the subscription contract rules in the DMCCA when they come into force.

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The Competition & Market Authority’s enhanced powers in the DMCCA

Chapter 4 of Part 3 of the Digital Markets, Competition and Consumers Act 2024 (DMCCA) came into effect on 6 April 2025.

The DMCCA does not change Section 62 of the CRA, and it gives consumers the right to complain direct to the CMA for breaches of “consumer protection law”, which includes the Consumer Rights Act 2015.

This means that consumer landlords will be able to complain to the CMA about unfair terms in agency agreements, including tie-in clauses using Section 62 of the CRA.

In April 2025, the Competition and Markets Authority published a document called The CMA’s approach to consumer protection, and two of its areas of focus for investigation cover unfair exit charges and fees that are hidden until late in the purchase process:

It is not yet known if the CMA will prioritise action against letting agents.

Final thoughts

When I worked as an in-house solicitor for 25 years, one of my mantras was that the law is only the first step in deciding what a business should do. It’s the minimum hurdle: don’t break the law. The next step is: what is the right thing to do?

I believe that all businesses should act fairly and transparently with their customers, even if those customers are not “consumers”. Imposing unfair terms and acting unfairly disrupts the fiduciary relationship of mutual trust and confidence that landlords have with the agents who act on their behalf. It’s short-sighted and does not create a positive relationship.

Landlords who feel unfairly treated will complain to other landlords in person and in Facebook groups. They often write to me as well.

At a time when the relationship between landlords and tenants is being rebalanced to give tenants more freedom, how about those who provide services to landlords bring more fairness to their dealings with landlords?