More than 40 leading property developers and freeholders in the UK have signed a Government-backed pledge to deal the treatment of leaseholders in the property industry.
The voluntary pledge to tackle the treatment of leaseholders in the property industry has been signed by Taylor Wimpey and Barratt Homes, in a move that is designed to close the legal loopholes that force leaseholders to pay unjustified legal fees along with reforms to make retirement property fees more transparent.
Signatories have also committed to abolishing ‘doubling clauses’ which can result in ground rents increasing over a short period of time and to changing the terms of leases for those affected.
Under current rules, leaseholders who wish to take their landlords to court to challenge exorbitant fees or unfair hikes in annual charges also run the risk of being forced to pay their landlord’s legal fees. This applies even if the court rules in their favour, hitting some tenants with bills of tens of thousands of pounds.
These ‘legal loopholes’ mean leaseholders who contest high fees and hikes in service charges in court risk paying a landlord’s legal fees, a rule which applies even if the court rules in the leaseholder’s favour.
James Brokenshire, Secretary of State for Housing and Communities, said: “Since becoming communities’ secretary, I have repeatedly made clear my ambition to end those exploitative and unfair leasehold arrangements that have no place in a modern housing market.
“The new industry pledge signed by leading freeholders and property developers will further support existing and future leaseholders by protecting them from onerous fees.
“Its great news that leading names such as Taylor Wimpey and Barratt Developments have already signed up to the pledge, and I want to see others who have not yet signed up do the right thing.”