June 28, 2017

Exit fees and retirement estate agency: You now have 29 days to act

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In the second of our articles on the Law Commissions work on exit/transfer fees, we turn to their survey of some of retirement company web sites.

Again the picture is very mixed in terms of how clear each company is in providing information about the fees that leaseholders face. As well as “exit” fees the Law Commission looked at other issues such as the estate agency type charges made at the point of sale.

While some web sites are commended as being clear, others are not. Even Carlex is not sure what some landlord’s use their exit fees for and whether they go toward the contingency fund or the landlord’s pocket.

We assume any company that does not make its charges clear is doing so for a reason.

The Law Commission reports that purchasers need to find questions 36, 37 and 57 on the McCarthy and Stone website, or delve through the sub-pages of the Peverel website, before they can get to the answers they need on the sorts of fees which apply.

Companies such as Audley come out a little better on some issues, but we still do not understand why they need to charge a 2% sales administration fee if you choose not to appoint them as the estate agent during a sale rather than their own agent which charges a 3% fee for doing the work.

We should note that since the survey McCarthy and Stone have amended their Q&A section to simplify the layout of issues, including those relating to exit and contingency fees.

Although a retirement village type site seemed to be commended in the secret shopper test, the named Retirement Village company fared less well in the website test.

LKPnewsletter3In answer to the question of what happens to exit/transfer fees, the Law Commission records that the Retirement Villages web site states:

Q Who receives the Assignment Fee and what is it for?

A The fee is payable to Retirement Villages, or one of their wholly owned subsidiary companies, being the freeholder of the village. It forms part of the purchase price. Please visit the Q and A page of the village you are particularly interested in for further information or ask our sales staff.

Does this mean the fee is used towards a contingency fund or not?

The full copy of the Law Commission survey of retirement home provider web sites can be read HERE

Our next article start to cover the questions in the Law Commissions main report and the sorts of information they need from those of you living in retirement homes.

Comments

  1. The Exit Fee that Peverel/Firstport have as well as 0.25% on Sale, is the more expensive Welcome Pack which is given to new residents, who then pay for the Welcome Pack as part of the Management Fee.

    The selling resident is charged over £300.00 for the Welcome Pack, refusal to pay this Exit Fee means that you are unable to sell your chosen flat.

    So a new resident pays this Exit Fee as part of Management Fees and then pays again when they leave, so that is over £600 that are Hidden Exit Fees.

    Peverel/Firstport have removed this information from the Yellow Booklet, “your Guide to”:

    “OUR FEES EXPLAINED” What does our Management Fee Cover- Your Money our Management?

    Both Estate Agents and Solicitors give information but sadly usually incomplete, or otherwise who would purchase a Peverel/Firstport Flat?