A fairer deal on the horizon? ALEP welcomes CMA’s investigation into UK housebuilders’ mis-selling of leasehold

Monday 7 September 2020

The Association of Leasehold Enfranchisement Practitioners (ALEP) has welcomed the CMA’s enforcement action against four of the UK’s house builders over their mis-selling of leasehold properties. 

As well as mis-selling of properties, the Competition and Markets Authority (CMA) will also investigate evidence surrounding potentially unfair terms concerning ground rent.

Mark Chick, Director of ALEP, said: 

“This is very welcome news for the sector. For many years ALEP has been campaigning to highlight leasehold issues and the need for consumers to obtain advice from an appropriately qualified professional.

One of the main reasons that we have seen so many people adversely affected by the so-called “leasehold scandal” is because of an ‘advice failure’ where onerous lease clauses were not spotted by solicitors employed by the buyers of these properties.

When we set ALEP up it was precisely so that members of the public could obtain access to a vetted professional with proven relevant experience in leasehold. Unfortunately, as I suspect the CMA investigation will show, on many occasions members of the public entered into transactions which were on manifestly unacceptable terms.  

We therefore welcome the CMA’s investigation into the alleged practices of certain developers, so that these types of unacceptable lease clauses are more widely highlighted and so that the practice of using them will cease and that the public will be much more aware of the need to obtain the right kind of unbiased advice in relation to leasehold property.  

With numerous reforms on the horizon, we hope that the results of the CMA’s investigation will help shape the future of the UK’s leasehold system.

Leasehold enfranchisement is a technical and complex subject; therefore, it is imperative that consumers are confident that they are guided by experienced professionals who understand the nuances and legislation surrounding enfranchisement.”