Developers Should Be Transparent With Leasehold Information
Following the recent mis-selling leasehold scandal, leading industry body The Conveyancing Association has pressed the government and managing agents to provide conveyancers with up to date and relevant information.
Conveyancers are adamant that under the Leasehold Property Enquires (LPE1) data, all enquiries should have the information within ten days and charge no more than £300.
Under the consultation on the Leasehold reform issues, the government are looking for ways to improve the way that leasehold property is marketed. It is clear that many people suffering because of their leasehold deal believe that many of the issues they now encounter were not made overtly clear, or ignored entirely, during the buying process.
Recent reports found that a staggering 94% of respondents deeply regret buying a leasehold property. This is mainly due to the deceptive language and communication used by developers. Unbelievably, 42% of respondents were sold the property based on the ambiguous language of it being a ‘virtual leasehold.’
24% of those allured by the confusing wording, never had their misconception corrected by anybody in the house selling process. Even more worrying was the fact that 11% were sold the house on the advice that the property was ‘just like a freehold’.
When 57% of respondents bought the property with no understanding of what a leasehold property was, with much of the information misrepresented or completely manipulated, it is clear that more stringent reforms were desperately needed.
The new reforms will ensure that property developers and managing agents explicitly make terms and conditions clear to the buyer before the process moves towards completion.
Developers should also make it clear to buyers if their property is exempt from the current leasehold reforms.
Beth Rudolf, Director of Delivery at The Conveyancing Association, said: “We are keen to ensure the necessary criminal action is taken against those who mislead purchasers and do not provide the upfront information required in order for the purchaser to make an informed decision.
“under the Consumer Protection from Unfair Trading Regulations, anyone marketing the property would be subject to criminal action if they had not made the buyer aware of the lease and the fact that the property was not exempt from the rules, at the point of marketing.”
Have you worked with home buyers that were confused by their leasehold sale? Will these reforms place more responsibility on the developer or managing agents?