Government plans to close legal loopholes that force leaseholders to pay unjustified legal fees and wait too long for information have been welcomed by Thursfields Solicitors.
The leading Midlands law firm was commenting after the Ministry of Housing, Communities and Local Government made a series of announcements on leasehold reform.
The changes will cap the cost of securing leasehold information to not more than £200 and will limit the gathering process to within 15 working days.
Louise Jones, a senior associate at Thursfields and head of the company’s New Homes team in its Residential Property department, said: “We welcome these changes, which are long overdue.
“The feeling of euphoria experienced when you sell your house and find your dream home is short-lived when you sit down and calculate exactly how much the move is going to cost.
“From estate agent fees to solicitor fees, and from stamp duty land tax to removal costs, the list seems never ending. To then discover that because you own a leasehold property you are liable to further costs seems to be rubbing salt in the wounds.”
Mrs Jones explained that landlords or management companies often employ managing agents to look after communal areas surrounding leasehold properties, and sellers have to provide buyers with detailed information about charges paid to those managing agents.
She said the required standard leasehold property enquiry form (LPE1) can take up to four weeks to be provided by the landlord, management company or managing agents, and the LPE1 fee charged can range from £150 to £400.
Mrs Jones said: “Securing this leasehold information can severely delay your sale, is often expensive and just another of those seemingly endless costs from the pot of money you are sitting on.
“The government has now confirmed it will introduce legislation to cap the fee payable for the LPE1 to accurately reflect the work involved, and for that to be no more than £200.
“There is also to be a £50 cap on refreshing that information so that if, for whatever reason, you do not exchange contracts within six months it will only cost £50 to renew it.
“But the most impactful point in the government announcement is that the information should be delivered within 15 working days.
“Currently, a leasehold property transaction often adds three weeks to a purchase process, and in more than 30% of transactions it takes ease administrators more than 50 days to produce the LPE1.
“The changes therefore have the potential to knock three weeks off the average leasehold transaction.”
Mrs Jones added: “Further good news is the government wants no transitional provisions once legislation comes out, and that these cost caps and time limits should be implemented immediately.
“This will mean leaseholders are no longer subject to unreasonable costs and ridiculous delays in obtaining information they need and are paying for.”
