Leasehold buyers may be able to claim compensation following the result of the Competition and Markets Authority’s investigation

17 Jun 2019

UK’s competition authority will investigate whether some leasehold buyers have been charged exorbitant fees upon the purchase of their property. The Competition and Markets Authority (CMA) will also examine whether the buyers have been given misleading information and whether the buyers’ contracts have included unfair terms.

The CMA has concerns regarding burdensome ground rent terms, inflated service charges, exaggerated permission fees and unjustifiable costs regarding enfranchisement or extension of leases. The investigation aims to establish whether leasehold buyers are given adequate information when buying a leasehold property, which enables them to understand the responsibilities associated with the property, such as the obligation to pay ground rent during a given period. The examination will also seek to establish whether leasehold buyers end up paying exorbitant fees due to unfair terms being included in their contracts. Such fees consist of management, service, permission payments and ground rents, with the latter sometimes even doubling every few years.

Through this investigation the CMA aims to ensure an adequate protection of the leasehold buyers in the UK.

Colman Coyle aims to publish a further post once the CMA reaches a conclusion in this investigation.

Raluca Sterian

Trainee Solicitor

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