When does the legislation come into force?
While there is no set date confirmed yet, The Ministry of Housing, Communities and Local Government have pledged a commitment to reform the housing sector. They confirm they will look to roll out the new legislation as soon as Parliamentary time allows. As part of the changes and once the new legislation kicks in, those who have been incorrectly sold a leasehold home will be able to buy their freehold for free, without incurring legal costs. Freeholders and managing agents will be given a 15-day time limit to respond to enquiries plus a maximum fee limit of £200 to ensure the homebuying process is easier and more accessible.
The end of the exploitation
The government announcement is welcome news to the many who have found themselves at the receiving end of spiralling leasehold costs and ground rents. Leaseholders have found themselves not only being charged expensive ground rents, but also high service charges and one-off bills. In some cases, ground rents have risen to a point where properties have become unsellable, with extortionate fees being charged.
Advice for consumers
Unfortunately, and what hasn’t helped, recent research has revealed that many people buying or who bought leasehold, don’t know what leasehold is. Leasehold is where you own the property and the land it sits on for a fixed period of time, in line with the agreement made with the landlord. The landlord charges ground rent, effectively making you a tenant, and leaseholds usually last from 99 to 125 years.
Until the new legislation is rolled out, the current advice for those looking to purchase a new home that may be sold as leasehold, is to check the lease carefully. Questions about the lease should be asked, but to avoid uncertainty or being caught out with anything, it might be worthwhile to get a solicitor for further help, for peace of mind.
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