CA calls for criminal action where leasehold purchasers have been misled

The Conveyancing Association is calling for criminal action to be taken against sales agents who mislead purchasers about a property’s tenure.

The proposal is part of the CA’s response to the Ministry for Housing, Communities and Local Government consultation on reforms to the leasehold system.

The trade body points out that under the Consumer Protection from Unfair Trading Regulations, anyone marketing a property would be subject to criminal action if they had not made a buyer aware of the lease, and the fact that the property was not exempt from the rules, at the point of marketing.

The CA told the MHCLG that managing agents and freeholders should be obliged to provide leasehold information within 10 working days of a request during the conveyancing process. It says the maximum fee for providing full leasehold property enquiries data on the LPE1 form should be between £150 and £300, depending on the complexity of the estate.

The CA 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. It says 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.

Another issue the CA has raised involves the practicalities of ensuring houses, that are not exempt from the rules, are not sold as leasehold and the process by which tenure can be changed to freehold. It says redress should be available to those where a long lease has been incorrectly granted on a property.

It’s calling for all legal costs, and any required premium, to be 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.

Conveyancing Association director of delivery Beth Rudolf says: “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.”

The CA is urging its members, and other industry stakeholders, to respond to the MHCLG consultation individually before the deadline of 26 November. Responses can be submitted online or by e-mailing a response to: leasehold.reform@communities.gov.uk

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