Ask the experts: Rules around sales, plus lockdown rent arrears

  • 19 Apr 2022

Our legal experts are on hand to provide you with advice on setting up and running your own business. Adam Grimwood, a solicitor at FSB Legal Hub, answers some of the latest queries.

Q I’m thinking of having a sale – are there rules about what I can and cannot do?

Various pieces of law and guidance govern this, but probably the most significant is the Consumer Protection from Unfair Trading Regulations 2008. The clue is in the title, and all traders should remember that sales and promotions must be genuine. If an item is marked as in the sale, it must genuinely be so, and it’s unlawful to suggest otherwise. 
If you refer to a previous price as well as the reduced price, the item must have been genuinely on sale for the previous price for a significant period of time. To suggest an item is now in the sale when in fact it had only ever been on sale at the higher price for 24 hours would clearly be unfair.  

 

If your sale is advertised as having ‘up to 80 per cent off’, make sure a significant proportion of the items in the sale have 80 per cent off. It wouldn’t be right to have hundreds of items in the sale with 10 per cent off and one with 80 per cent off, but market it as an ‘Up to 80 per cent off’ sale. 

If the sale is advertised as being for a fixed period of time, the duration must be genuine. For example, if a retailer is holding a ‘flash’ one-day sale, that sale must only be for that day, otherwise it puts misleading pressure on the consumer to buy there and then. 

When it comes to returns, the Consumer Rights Act 2015 applies regardless of whether the item was in the sale. Consumers are entitled to return faulty items, and this includes reduced items. Where a retailer may tweak things is regarding ‘non-faulty’ items – for example if a shop allows customers to change their mind within a certain period, even when there is nothing wrong with the goods.

Misleading or unfair trading practices are criminal offences. The consumer also has various legal remedies, including unwinding the contract, seeking a discount or suing for damages. Businesses should be able to produce evidence of compliance. From a legal perspective it is wise to adopt a safety-first approach. 

Q During the pandemic, I built up rent arrears on my premises. My landlord now wants me to pay. What’s the latest?

In England and Wales, the ban on forfeiture of commercial premises for rent arrears and restrictions on bailiffs’ ability to seize tenants’ goods remained in place until 25 March.

The Commercial Rent (Coronavirus) Bill, has ringfenced outstanding unpaid rent built up in lockdowns. 

Landlords should allow for ringfenced rent arrears from forced periods of closure and share the impact with tenants. Agreement should be sought between parties and, if unsuccessful, there is a legally binding arbitration process, delivered by private arbitrators in accordance with guidelines. 

There is an amended ‘Code of Practice for Commercial Property Relationships Following the Covid-19 Pandemic’, which should be adhered to. The Code:

  • states that, where affordable, a tenant should meet their obligations in full
  • makes clear that preservation of the tenant business’s viability should not be at the expense of landlord solvency
  • states tenants should not have to take on more debt – or restructure their business – in order to pay their rent
  • provides guidance on negotiation, with the intention that they should resolve rent disputes before the Bill comes into force, where possible.

     

     

The Bill prevents landlords from issuing court proceedings pursuing ringfenced debts while arbitration is available or ongoing, and also prevents landlords from petitioning for the bankruptcy of a business tenant following non-payment of a statutory demand relating to any ringfenced debt served on or after 10 November 2021. 

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