In essence, the 1999 Regs apply when a consumer (acting ‘outside his trade business or profession’) is dealing with a non-consumer supplier (who is acting ‘for purposes relating to his trade business or profession’) on terms that have ‘not been individually negotiated’. In effect, if there are standard terms that have been drafted in advance (and which ‘the consumer has therefore not been able to infl uence the substance of’) then a provision will be struck out if, ‘contrary to the requirement of good faith’, ‘it causes a significant imbalance in the parties’ rights and obligations... to the detriment of the consumer’. Thus, unfair standard-term provisions can be struck out.

Whilst it was held in Newham [2004] that the 1999 Regs could apply to contracts affecting land, it has not been until now that the courts have ruled specifically in the context of a tenancy agreement. The case involved standardterm tenancy agreements from the Peabody Trust, which contained a provision seeming to allow L to unilaterally vary the terms of the tenancy agreement. At the end of the day, that was held not to be a correct interpretation, but the court went out of its way to say that if it had be so, then such a provision would have fallen foul of the 1999 Regs. As such, it is clear confirmation that the Regs do apply to letting agreements.

Needless to say all such cases have to be decided on their own facts and circumstances. In theory, there is no reason why the 1999 Regs could not apply to the terms of a long lease in a block of private fl ats, if (for instance) L’s solicitors had made it clear that the terms of the lease were not negotiable in any way. As another possible complication, consider the standard provision that allows L to introduce or change rules relating to the use of a fl at or common parts; such unilateral powers of amendment may now fall foul of the 1999 Regs. But, that could be to the disadvantage of the Ts (eg if some Ts are acting anti-socially then the other Ts may want L to use that power to amend the rules so as to outlaw the anti-social behaviour being complained of – but they may then find that the anti-social Ts can argue that L’s power to change the rules should be struck out under the 1999 Regs). In practice, one suspects that such concerns are more theoretical than practical, and the impact of the 1999 Regs on long leases is likely to be minimal. But, for institutional Ls with standard-form letting agreements, it is very important to review the possible impact of the 1999 Regs (and, in particular, to study the OFT guidance). Peabody Trust v Michael Reeve [2008] WLR (D) 181.© Practical Lawyer