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‘Leasehold in its entirety needs amending’ – Conveyancing Association

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  • 20/09/2017
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‘Leasehold in its entirety needs amending’ – Conveyancing Association
The Conveyancing Association (CA) is urging the government to consider commonhold as a realistic and fairer alternative to leasehold arrangements.

In its response to the Department for Communities and Local Government’s (DCLG) consultation paper ‘Tackling unfair practises in the leasehold market’, the CA argued using commonhold by developers could solve many of the problems that have been raised recently.

These include escalating ground rents, the sale of the freehold in order to make a substantial profit, and the rise in fees and premiums to leaseholders.

CA argues that leasehold should only be applicable where there are genuine shared amenities and the term of the lease should be 999 years with a peppercorn ground rent – if commonhold is not deemed to be the solution.

Reform of the leasehold process is one of the key work streams within the CA’s Strategic Plan, ‘Building the framework for the future’.

 

Reasonable fee tariff

The representative body for conveyancers also argues that all administration fees should be based on a reasonable fee tariff, and that leaseholders must have access to a redress scheme if the lease administrator attempts to charge unreasonable fees, or does not respond within five working days of a request.

“Much of our focus has been on whether commonhold could provide a real alternative to leasehold and following research, and a survey of the 175 commonholders in England, it was clear to us that it works well and the vast majority are happy with their arrangement,” said Beth Rudolf, director of Delivery at The Conveyancing Association.

“Plus, those that have also owned leasehold property said they would choose commonhold over it,” she added.

Rudolf added that it was important to define when leasehold can be used, the minimum lease terms, peppercorn ground rents, reasonable fees, and access to a redress scheme.

“These proposals are all designed to ensure we have a much fairer and transparent process in place, and that the money charged for various services is actually what it costs to deliver, not an arbitrary figure plucked out of the air in order to deliver as much profit as possible,” explained Rudolf.

She continued: “The current system has clearly been abused, which means that it is leasehold in its entirety that needs amending. We will continue to work with the DCLG to deliver what is required and to produce a system that has the needs of the leaseholder at its heart.”

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