Minister warns estate agents over retirement sales brochures

Estate agents must be ‘crystal clear’ about so-called event fees when marketing and selling retirement homes under a new statutory industry code of practice.

Answering a Parliamentary question about implementing the Law Commission’s recommendations on the regulation of event fees, Housing Minister Christopher Pincher said it would ensure that these cannot be charged unexpectedly, while those that breached the code would be regarded as unenforceable.

The Law Commission published recommendations back in 2017 following concerns raised by the Competition and Markets Authority about the fairness of some retirement property leases that result in leaseholders paying an event fee of between 0.25% and 30% of the sale price of the property when selling or sub-letting. Concerns were also raised about their lack of transparency for older people and their families when buying a leasehold retirement property.

It found that event fees can make specialist housing affordable by deferring part of the payment for services until owners come to sell.

But the report suggested limiting when an event fee can be charged and, in some situations, the amount that can be charged. It also urged the government to impose stringent obligations on landlords to provide transparent information about the event fees payable to a consumer early in the purchase process.

The government promised to implement most of the recommendations in 2019 but has only now provided an update with initial details about the statutory code.

Pincher (pictured) added: “Developers and estate agents will be required to make all such fees crystal clear to people before they buy, so prospective buyers can make an informed decision before forming a financial or emotional attachment to a property.”

It is considering two further recommendations, on succession rights and a database of leasehold retirement properties with event fees, and has promised to respond.