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4. Consumption of land
The application of consumer law to consumers of land is no longer contentious, since the internal market in capital cuts across the property shield,84 and while land itself cannot move investment in land can move within the internal market and is properly within the European purview.85 Most buyers of homes are not consumers and they do not need protection beyond ensuring that they receive professional advice about their purchase. On the other than a tourist renting a holiday home for a fortnight’s self catering is a consumer just as much as a hotel guest or a package tourist, and there is also a need for protection when buying new build from a developer or ‘investing’ in a timeshare. The concern is the patchiness of the protection and the need for it to be extended and made coherent. Land contracts are fully protected in relation to unfair commercial dealings,86 though no longer in relation to secured consumer credit.87
A ‘comprehensive’ scope is likely in the sense that business contracts will be covered as well as consumer contracts, since this is favoured by the Council88 and is really a de minimis assumption of the Commission’s Green Paper.89 The fields peripherally relevant to land law are unfair terms, distance marketing, and off premises marketing (formerly colloquially called ‘doorstep selling’). For the time being responsibility has been split between Justice and Home Affairs which is dealing with contract/civil law and the Consumer Affairs Directorate which has produced a draft Directive on Consumer Rights90 and which envisages
84EC §295 ex §222; Sparkes ELL (n 40) [3.18ff].
85Sparkes ELL (n 40) [1.32ff].
86Unfair Commercial Practices Directive, 2005/29/EC, [2005] OJ L 149 22; Sparkes ELL (n 40) [5.40ff].
87Credit Agreements for Consumers Directive, 2008/48/EC, [2008] OJ L133 66.
88JHA Council (n 11) [10-11].
89Green Paper (n 9) [4.2.1]; K O’Callaghan & Y Francis ‘Contract Hit [2010] European Lawyer 29.
90Proposed Directive on Consumer Rights COM (2008) 614,; J Smits ‘Draft Directive on
Consumer Rights’ (2010) 18 ERPL 5.
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a full harmonisation.91 Ultimately it will be necessary for European contract law to reflect that consumer directive fully, which is at present far from the case.
For example, the existing protection against unfair terms is to be amended by the Draft Consumer Directive,92 and this needs to be reflected in the Draft Common Frame of Reference.93 Unfair terms protection already exists for land buyers who happen to be consumers and so no fundamental change is proposed.94
The real issues are marketing at a distance (telephone and internet) or off business premises (what used to be called inaccurately ‘doorstep’ selling). Issues affected are information rights and withdrawal rights. The draft Directive produced by the Consumer Affairs Directorate95 is inconsistent with the Draft CFR in the land exclusion and conversely the coverage of land contracts is not improved. The draft Directive allows consumers rights to information and withdrawal rights when buying under a sale contract; this is limited to sales of goods - items at once both tangible and movable96 - and thus contracts to sell land are outside the scope.97
Nevertheless there is an exclusion for the sale of immovable property or other immovable property rights, except for rental or work to immovable property.98 That exemption was needed in the current legislation99 which at first blush applied to all sales and service contracts and so had to be cut down by the land exclusion, but it would become redundant in
91Consumer Proposal (n 90)§4.
92Consumer Proposal (n 90) §§30-39.
93DCFR (n 2) II.-9:401.
94Unfair terms: contracts drafted in advance by trader/third party to which consumer agreed without chance to influence contract Consumer Proposal (n 90) §30.
95Consumer Proposal (n 90); J Smits ‘Draft Directive on Consumer Rights’ (2010) 18 ERPL
96Consumer Proposal (n 90) §2[3].
97Of course contracts for services to land may be protected.
98Consumer Proposal (n 90) §20[1](a). See recital (35) Home improvement – only conveyance of interest in real property should be excluded form the scope of withdrawal rights 20[1](d).
99Contracts Negotiated Away from Business Premises Directive 85/577/EEC, [1985] OJ L372 31, §3[2](a).
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a new Directive limited in scope to goods. Immovables are to be excluded from legislation about goods, an exclusion of that already excluded. It would in fact be necessary to bring rentals within the scope. When the same withdrawal rights appear in the Draft Common Frame of Reference100 there continues to be an exclusion for the construction or sale of immovable property or rights in immovable property,101 following the general land exclusion of the Draft Common Frame of Reference, but this time, properly, a withdrawal right is conferred in relation to a rental. This last term remains undefined.
The other withdrawal right mentioned in the Draft Common Frame of Reference is for right to use immovable property under a timeshare. This definition looks ill-drawn. If the Consumer Proposal enters force, and the Common Frame of Reference becomes European contract law, the latter will need to include the provisions of the former, copied out to achieve a full harmonisation. This is done, partly, for distance and doorstep selling, but the logic has been lost sight of in relation to timeshares. Pointillism is taken to an extreme where coverage is reduce to a single point. By confining itself to immovable property the withdrawal right on offer does not allow withdrawal from a timesharing of caravans or houseboats, sectors with significant consumer problems. It will work alright with the archetypal timeshare which is equivalent to a flat purchase except that the consumer’s right to use the flat is limited to a given couple of weeks each year, a form of disconnected ownership. Such schemes are not those with the worst problems or the greatest need for consumer protection. Rather these are holiday clubs102 and similar schemes in which what is given is the right to a fortnight’s holiday in unspecified accommodation. Timeshare transcends the land/movable divide and the definition needs to cover both.
In short the revision of the acquis does not fill the land lawyer with confidence.
100DCFR (n 2) II.-5:201.
101DCFR (n 2) II.-5:201(2)(c).
102DCFR (n 2) II.-5:202; Sparkes ELL (n 40) [6.23], [6.66].