The Government has confirmed that it will enact Law Commission recommendations to protect older people and their families. This will introduce protections for leaseholders in retirement properties against unexpected fees – known as event fees – being charged in unfair circumstances. It will also impose an obligation on landlords (or others who benefit from these fees) to provide transparent, upfront information about the fee to potential purchasers of retirement properties.
The Government has told the Law Commission that it will implement the majority of the recommendations made in our event fees report published in 2017.
Stephen Lewis, Commercial and Common Law Commissioner said:
“We are delighted that the Government agrees with our recommendations and will be enacting change that will protect older people from these hidden fees.
“We’re ready to support the Government, as required, to implement these important reforms.”
Our recommended reforms include:
- Restrictions on when event fees can be charged. Under our recommendations, they could only be charged when the property is sold, or, in limited circumstances, when the property is sub-let or where the resident has died or the property is no longer their primary home.
- Standardised, transparent information to be provided at an early stage in the purchase process, including how much the fee is likely to be, who gets it, and what the home owner will receive in exchange.
- Guidance and an online database for estate agents and consumers to ensure that event fee information is included in all advertisements.
- A cap on the fees charged for sub-letting or change of occupancy – this would be capped annually at 10% of the total event fee.
- Protections so that if a resident’s partner or carer moved into the property as their principal home an event fee could not be charged on that change of occupancy.
The Government’s response
The Minister for Housing and Homelessness, Heather Wheeler MP confirmed that the Government will “implement the report’s recommendations, with exception of two issues” which the department will be exploring in further detail.
Firstly, they agree with the aims of the recommendation to establish an online database to provide information to prospective buyers. But, they will be commissioning further research to understand the best means to achieve this.
The Government also wants to further consider the recommendation for spouses’ and live-in carers’ succession rights to stay at a property, without payment of an event fee. This is to gain a better understanding of the implications for both consumers and new supply.