– lawyers want amendment to Consumer Rights Bill
– last chance to contact CMA
The Conveyancing Association estimates that there are £80 million in charges every year in the transactions of 300,000 flats.
Many of them are bogus and exploitative, say the lawyers.
They now want to change the Consumer Rights Bill to end this revenue stream of leasehold fiddling.
LKP fully supports the initiative as it is repeatedly contacted by leaseholders who experience frustration and delays – or much worse – at point of sale.
This week the would-be buyers of a woman’s £550,000 flat in north London were told that if they have a party guests are not to use the main door.
The freeholder, who owns the other three flats in a conversion, has informed the solicitors of the buyers of the property of these new conditions.
They have highly questionable legal validity, but the buyer is now understandably having second thoughts.
LKP’s advice? Threaten immediate legal action against the freeholder and demand a court appointed managing agent for the site to stop the fiddling in future.
This high-handedness is unusual only because it is so blatant and inexpert.
Freeholders and their appointed managing agents have considerable power at point of sale and can easily prevent one taking place.
That is leaving aside the exit fees encountered in leasehold retirement, which in upmarket schemes can be 10 per cent.
Now a campaign is being launched by the Conveyancing Association and the Bold Legal Group, which represent the UK’s largest conveyancing firms, to amend the Consumer Rights Bill.
The initiative takes place just as last submissions are invited to the Competition and Markets Authority inquiry into leasehold management.
The CMA published an interim report at the start of August, and will this week finish consulting on its findings. The deadline for contributions is Friday and the final report is due in November.
A survey by the Conveyancing Association found that a quarter of its members had experienced a client losing a leasehold property due to delays and high fees from managing agents.
The survey found some agents charged more than £1,000 just to complete simple paperwork.
Lloyd Davies, managing director of the solicitors Convey Law, said:
“Unfortunately, it is not the case that some agents are worse than others. If it is a leasehold property, there are always problems. Managing agents are completely unregulated so get away with behaving and charging what they like.
“Long delays can scupper transactions after months of trying to push them through. Where there are chains involved, this can disrupt the moving plans of several other buyers as well.”
Warren Kaye, a director at O’Neill Patient Solicitors, said: “These firms are in business only to make money . . . but they use every opportunity to squeeze as much profit out of leaseholders and buyers as possible.
“They have no obligation to provide a service to the leaseholders, who have no choice but to pay whatever is demanded — or go to the enormous expense of instructing a lawyer, which these agents know most people will not do. The whole sector is seen as very profitable, with big businesses buying up books of ground rents at auction for the sole purpose of making money.”
The CMA said: “If leaseholders want us to go in hard, this is their last opportunity to tell us. We want to hear from everyone with a story or a point of view.”