The Law Commission is reporting its work into the issue of retirement leasehold exit fee here
Anyone who has paid these fees, can contact the Law Commission on this email address:
Following a considerable amount of activity by Carlex, the issue of exit and subletting fees was taken up by the Office of Fair Trading, which reported in September 2012 that exit fees were “likely” to be an unfair contract term.
The Law Commission will hopefully conclude the issue.
Work on the project commenced in October 2014, and it expects to publish a consultation paper in September 2015 and make interim recommendations for reform in March 2016
The project was referred to the Law Commission by the Department for Communities and Local Government (DCLG) and will look at leasehold terms that oblige the lessee to pay a fee when title is transferred or where there is a change in occupancy.
“Concerns were raised with the Office of Fair Trading (OFT) about retirement home developments where these terms are chiefly to be found,” the Law Commission says.
“The amount payable is usually calculated as a percentage of the sale price or the original purchase price. Terms may be triggered where the transfer of title is voluntary, for example on sale, or involuntary such as under a property transfer order.
“Change of occupancy terms may be widely drawn and can be triggered on more than one occasion over the lifetime of a lease, for example, where the lessee goes into hospital during spells of illness.
“The OFT concluded that the terms were potentially unfair and that there was a lack of transparency, particularly in the sales material.
“The nature of the terms can be unclear and some appear to fall outside the existing regulatory regimes.
“As a result there may be no means by which a lessee can effectively challenge a term or the reasonableness of the sum involved.
“In response to the OFT’s report some landlords voluntarily entered into undertakings on the use of the terms. However, OFT also recommended that the Government should consider further measures, including legislative reform.”
The Law Commission has set up this month an “advisory panel composed of independent experts and representatives of industry and consumers”. This includes Carlex.
The LC panel has made a number of visits in January:
A tour of Grove Place, a retirement community near Southampton operated by LifeCare Residences
The Carlex/LKP roundtable briefing on leasehold reform at Portcullis House, Westminster
Arnold v Britton UKSC 2013/0193 (an important Supreme Court case on fixed service charges)
“The project will be reviewed in March 2016 at which point we will make interim recommendations for reform. If the project continues we will make final recommendations in March 2017.”