CA urges consumers to check leasehold house cases

Jake Carter

July 5, 2021

The Conveyancing Association (CA) has urged consumers to contact their conveyancers if they bought a leasehold house between 2000 and October 2015.

This follows the initial success of an industry campaign to deliver a fairer system and outcomes for those who have bought leasehold houses over the past two decades.

Last month, the Competition and Markets Authority’s (CMA) investigation into the sale of leasehold houses resulted in two firms, Aviva and Persimmon, formally committing to making changes for the benefit of leaseholders.

The commitment was welcomed by the CA, after Aviva agreed to remove from leasehold contracts certain clauses which were doubling the ground rent payable.

While Persimmon offered leasehold house owners the option to buy the freehold of their property for £2,000 or less, and make repayments to those who have already purchased their freeholds.

The CMA investigation received evidence from a CA homebuyer experience survey, which showed that fewer than 4% of home movers were given the required information under the Consumer Protection from Unfair Trading Regulations (CPRs).

The association also said it anticipates further rulings made, and that other developers and investment groups will also need to take similar action.

The CA is therefore urging those consumers who might be affected to contact their conveyancer to check their situation and whether they are able to claim with CPRs having been breached.

Beth Rudolf, director of delivery at the Conveyancing Association, said: “The CA is very supportive of the initiative taken by Persimmon and Aviva to undertake to resolve the issues created by their lease terms and would encourage other developers to follow suit.

“The leasehold mis-selling scandal has blighted leasehold houses but can be easily resolved by enabling leaseholders to buy their freehold for a reasonable sum and ensuring the resulting freehold title is not of the ‘fleecehold’ variety, as some have ended up with, whereby they were subject to large permission fees for a change of blinds or carrying out works at the property or rentcharges which if unpaid, whether demanded or not, would result in a long lease being created.

“We know the CMA has evidence of four other developers who created issues through doubling ground rents and other onerous lease terms and would encourage them to take the stance that Persimmon and Aviva have in trying to put the issues right for their customers.

“This is not just about leasehold houses but also on flats where rent doubling is in place, which will surpass the Housing Act prescribed limits, creating issues with the owner’s ability to get a mortgage.

“While we are delighted to see such big players as Persimmon and Aviva committing to tidy up the issues, overall many of the commitments in the undertakings are ratification of the announcements already made by the government on their plans for leasehold.

“What the leaseholders and property industry really needs is a Leasehold & Commonhold Reform Act sorting out the issues that continue to impact homeowners.

“Until this becomes legislation the homeowner does not know if their landlord and Lease Administrator or rentcharge owner will exploit the freehold of their home to make profit when their economic interest in the property should have come to an end when they first sold it to the consumer.”

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