You are here: Home - Mortgages - Buy To Let - News -

Rogue landlords found ripping off vulnerable retirees

0
Written by: Samantha Partington
31/03/2017
Unscrupulous leasehold landlords are collecting sky-high fees from older people living in retirement homes when they move into long-term residential care or need a permanent live-in nurse.

The rogue practices were revealed after a two-year investigation by the Law Commission, appointed by the Department of Communities and Local Government (DCLG), found ‘event fees’ were being abused and costs of up to 30% of the property price were being billed to retirees.

Retirement homes are nearly always sold on a leasehold basis and many of the leases include a fee triggered by an event. These events include the sale or sub-let of the property, if the for example the resident is moving into care, or if they changing the occupancy to allow a spouse or carer to live in their home.

High-quality specialist housing can be expensive owing to running costs for services such as communal facilities, security and on-site care. Event fees can be a good way of allowing those on low incomes to purchase a property now, but defer the payment of some of the running costs until they sell their house at a later date.

However, some landlords are hiding complicated fee calculations in terms and conditions or springing charges on older homeowners in unexpected situations.

Law commissioner Stephen Lewis said: “In the worst cases, a few unscrupulous landlords are getting away with very high hidden fees buried deep in the small print of a long and complicated lease.

“We’d urge the government to crack down on rogue landlords by regulating the sector and making sure that before consumers sign on the dotted line, they have already been told exactly what’s being provided for their money.”

The commission has recommended the regulation of the sector and the implementation of a code of practice. This would put an end to fees being charged unexpectedly and a cap on fees in certain situations.

It wants all fees to be outlined to the buyer at an early stage in the purchase process and changes be made to the Consumer Rights Act, which would mean a breach of the new code of practice would make the fees unenforceable.

The commission has also recommended that if a carer or the resident’s husband or wife moves into the property, an event fee would not be charged.

Lewis said legal uncertainties such as these were putting off developers from building more retirement homes for older people. The commission believes that if these uncertainties were removed, more investment would be encouraged back into the sector.

A DCLG spokesperson said: “It’s vital that the fees older people pay for retirement properties are fair, reasonable and easily understandable. We welcome the Law Commission’s wide-ranging review and we will consider the report’s recommendations closely.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

YourMoney.com Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
piggy bank lock
The six best short-term bonds on the market

If you’re looking for the best returns on your cash but you don’t want to lock away your money for...

Close