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CMA to investigate leasehold misselling (17 May 2019)

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CMA to investigate leasehold misselling (17 May 2019)

edited 17 May 2019 at 1:31PM in House Buying, Renting & Selling
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edited 17 May 2019 at 1:31PM in House Buying, Renting & Selling
In the press today, (17 May 2019), news that the Competitions and Markets Authority is to investigate the "scandal" surrounding leasehold homes sold subject to substantial regular increases in ground rents and charging "permission fees" to homeowners for improvements. The CMA said it would decide whether the practices constituted unfair terms, a breach of consumer contract law.

The U turn comes after the House of Commons housing committee published a damning report on the scandal in March, calling for the law to be changed, and criticising solicitors for failing to warn clients about the unfair deals, accusing some of being too close to developers.

More than 40 property developers and freeholders signed a government backed pledge this year to help homeowners affected, by changing the terms of leases for those with onerous clauses.

Sebastian O'Kelly, of the Leasehold Knowledge Partnership said ; "We welcome the CMA looking into this. It is long overdue and with be welcomed by the 12,000 owners of new leases with doubling ground rents and 88,000 where the ground rent is above 0.1 per cent of the sale price and whose properties are unsaleable."

Countryside Properties this week became embroiled in a row with Joe Anderson, Mayor of Liverpool. Anderson reportedly told residents he would ban the housebuilder from building in the city due to historic cases of selling leasehold homes with "doubling clauses" for ground rents.

A spokesman for the Homes Builders Federation said: "The industry has made huge progress to identify and address the issues raised on particular aspects of leasehold sales."
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