CA issues response to MHCLG Implementing Leasehold Reform Consultation

19 November 2018

The Conveyancing Association (CA), the leading trade body for the conveyancing industry, has today (19th November 2018) issued its response to the Ministry for Housing, Communities & Local Government (MHCLG) consultation on Implementing Reforms to the Leasehold System.

The consultation deals with implementing the Government’s plans for leasehold houses and also includes questions on the timely provision of leasehold sales information and the cost of providing it.

The CA believes that all managing agents and freeholders should be able to provide leasehold information within 10 working days, and that the maximum fee chargeable should be between £150 and £300 to provide the full Leasehold Property Enquiries (LPE1) data, depending on the complexity of the estate.

It is also calling for greater provision of information online, which would be accessible to conveyancers, without imposing any additional administrative burden on the Lease Administrator. This would enable the LPE1 to be ordered at the point of marketing, and the 12 answers in the form, which could change, to be refreshed when a buyer is found.

The CA has provided its views on the practicalities of ensuring homes, that are not exempt from the rules, are not sold as leasehold and the process by which tenure can be changed to freehold – allowing HM Chief Land Registrar or the First Tier Tribunal to do this - and the redress that should be available to those where a long lease has been incorrectly granted on a property.

The trade body would like to see all legal costs, and any required premium, paid by the seller if they cannot demonstrate a mistake or mutual misunderstanding has been made in selling the house as leasehold, plus it wants the seller to also be required to enter into a deed of variation to correct the error.

It is worth noting that under the Consumer Protection from Unfair Trading Regulations, anyone marketing the property would be subject to criminal action if they had not made the buyer aware of the lease and the fact that the property was not exempt from the rules, at the point of marketing.

The CA has issued the response to all its member firms and is urging both them, and all other industry stakeholders, to file their own individual responses to the Consultation by the deadline date of 26th November.

Responses can be submitted online at: https://www.gov.uk/government/consultations/implementing-reforms-to-the-leasehold-system or by e-mailing a response to: leasehold.reform@communities.gov.uk

Beth Rudolf, Director of Delivery at the Conveyancing Association, said:

“The CA response offers, what we believe, are a number of practical solutions to Government which will ensure the new measures work, and that where – in future – houses are sold as leasehold, without the required exemption, purchasers can get the tenure changed without cost to them.

“Also, we are keen to ensure the necessary criminal action is taken against those who mislead purchasers and do not provide the upfront information required in order for the purchaser to make an informed decision. At the same time, it is absolutely vital that Lease Administrators, for example, provide the information needed in a timely manner and at a fair cost – areas which have both been abused in the past.

“We want all our members, their colleagues and contacts, and all stakeholders and interested parties, to provide feedback to the Ministry because it is through this information – delivered by those who see the impact of the current leasehold situation on a daily basis – that we will get a system that is truly fit for purpose.

“In the past, consultations have only received a handful of responses but this can’t be the case on Leasehold Reform because, by taking five minutes now to inform the process, we will be saving everyone in the leasehold process many hours of frustration and cost in the future.

“This is a pivotal moment for our industry. We, at the CA, our members and many other industry colleagues, plus of course those impacted by the problems associated with leasehold, have all worked very hard to bring this issue to the attention of the policy makers. It is imperative that we make our voice heard again, and we must not lose the chance of positive change by allowing those with a commercial interest to make the loudest representations.”

For further information on The Conveyancing Association, and to read the response in full, please visit: www.conveyancingassociation.org.uk