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Leasehold charges for homeowners and landlords come under attack
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Discrepancies over leasehold charges for both homeowners and landlords have come under attack by one of the U.K’s leading conveyancing service agents. Myhomemove is asking for more transparency from companies and landlords relating to the charges aimed at their clients.
Warning
The plea from Myhomemove comes with a warning that landlords and homeowners could lose thousands of pounds through lack of clarity relating to applicable charges. Additional charges are being leveled at unsuspecting clients purchasing a leasehold property.
Leasehold charges for homeowners and landlords come under attack
Fees
In 2013, Myhomemove were responsible for the management of 8,246 leasehold transactions, of which 24% were for first time buyers[1]. The data supplied reveals that there are large differences between amounts charged by management companies.
Services for which management companies could charge include; –
*Notice of Transfer
*Notice of Charge
*Deed of Covenant
*Stock Transfer and Application
The combination of these fees can see leasehold clients charged anywhere up to £1,000.
‘Rip-Off’
Chairman of Myhomemove Doug Crawford was appalled by the findings. Mr Crawford said that it is, ‘incredible that there is no industry standard for management companies and landlords.[1]’
He went on to underline to problem of variable charges, saying that, ‘Over a third of our leasehold clients are charged between £100 and £200 by landlords and management companies; while the really unfortunate ones must pay between £500 and £1,000.[1]’ These fees were charged in addition to basic rent and moving costs.
The debate has also moved to Westminster. Jim Fitzpatrick MP has lobbied for a change in the law to protect clients from, ‘rip-off’’ [2] fees. Fitzpatrick called for total clarity, saying that, The government needs to rein in predatory property management companies with legislation that gives leaseholders a fair say and the ability to challenge any and all charges.[2]’
Signs of change
It appears that the pleas of influential industry figures are not falling on deaf ears. New Government legislation will give clients more transparency, with agents and management companies forced to provide notice of all fees when producing a contract. This, according to Crawford, will stop clients becoming, ‘baffled as to the amount they must pay[1].’
[1] http://www.myhomemove.com/news/greater-clarity-needed-from-leasehold-landlords
[2] http://blog.aboutconveyancing.com/2013/12/leasehold-service-charges-under-attack.html
