New Freehold Property Form Offers Increased Information To Confused Buyers
A new Freehold Management Enquiries form (FME1) is being launched in order to ensure buyers of a property, where a service charge or estate rent is likely to be charged, are fully aware of this fact before the conveyancing process is complete.
14 cross-industry trade and representative bodies, including the Law Society of England & Wales, have collaborated on the venture to ensure the questionnaire is robust and provides potential buyers with the additional information that may not have been offered during the ‘fleecehold’ mis-selling scandal.
The form will provide clarity on what the buyer will be liable to contribute and the exact prices that will be charged. Full details of any contribution required, who organises the maintenance arrangements for the shared areas, estimated increases to these amounts and who owes what will appear in the report. It is thought that this information will provide the buyer with full transparency and understanding of their obligations before they venture too far down the purchasing process.
The information that will be implemented and used on the questionnaire would come from ‘the Rent Charge Owner, the Management Company, the Managing Agent or any appointed representative of them.’
In the current conveyancing process, this information lacks a cohesive standardised approach with individual conveyancers raising their own questions. The new system will ensure that the sector’s responses are standardised and thorough, improving the information that buyers will receive.
Russell Hewitson, Chair of the Conveyancing and Land Law Committee, Law Society of England & Wales said: “It is good to have so many organisations involved in the production of this form and endorsing this set of enquiries for freehold properties which are subject to service charge payments.
“As it has now been made clear by government that it is looking to developers to sell houses as freehold rather than leasehold this may mean an increase in freehold estates involving charges for services that everyone on the estate shares – such as roads.
“We hope it will be easier for conveyancers and for those answering the questions to have a standard form.”
Will this system create a more robust and thorough information source for potential buyers? Will this prevent buyers from purchasing property without a clear understanding of their obligations? Does more need to be done to help buyers purchasing leasehold property?