LAW COMMISSION CONSULTS ON LEASEHOLD ‘EVENT FEES’

The Law Commission has launched the consultation into ‘event fees’ within the leasehold sector, referred to at the Parliamentary Roundtable organised by the Leasehold Knowledge Partnership. The Commission’s interest was sparked by the perceived unfairness of ‘exit fees’ in the retirement sector. This consultation looks costs incurred when a specific event arises, with charges ranging from 1% to 30% of the property value. Event fees include “transfer”, “contingency”, “deferred-management” and “selling-service” fees. The Law Commission is considering whether:

• should developers, landlords and managing agents of retirement flats do more to make potential buyers aware of event fees at an early stage;
• should this obligation be extended to estate agents; and
• how far can this be achieved through industry codes of practice?

Provisionally, the Law Commission believes Event Fees should be more transparent and the powers of the Court to enforce them should be strengthened. Consultation responses are invited until 29/1/2016.