The Competition and Markets Authority (CMA) has formally launched an investigation to find out whether people are being treated fairly when buying their home.
This follows ongoing concerns about the fairness, clarity and presentation of some leasehold contract terms, which could lead to people being stung by costly fees over a long period or having to abide by onerous terms.
The CMA’s consumer protection law investigation will examine two key areas:
Potential mis-selling: whether people who have bought a leasehold property are given the information they need to fully understand the obligations they are taking on, for example the requirement to pay ground rent over a certain period of time, or whether they have an accurate understanding of their ability to buy their freehold.
Potential unfair terms: whether people are having to pay excessive fees due to unfair contract terms. This will include administration, service, and ‘permission’ charges, where homeowners must pay freeholders and managing agents before making home improvements, and ground rents, which in some cases can double every 10 years.
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