Thursday, 2 October 2014

The Death of Leasehold Exit and Sub-Letting Fees?

There is great speculation surrounding the future of fees charged by Freeholders and or Managing Agents on the subletting of leasehold property.

This follows news that the Law Commission is going to examine the right to charge such fees as well as leasehold exit fees charged when selling or renting out a retirement flat.

According to the Leasehold Knowledge Partnership speculation is rife that such fees will be outlawed for good. 

The Partnership reports on its website:

‘This means anyone selling or renting out a retirement or non-retirement flat should keep all documentation with a view to making a claim in two and half years time’.

It adds:

‘LKP is deluged with inquiries about subletting fees, often where freeholders and their managing agents are plucking figures from the air for a sublet consent.

The tribunals have dealt with countless cases, but there is no binding decision on what would be a fair sublet consent (most freeholders have to give consent to a sublet, usually followed by the word “such consent not to be unreasonably withheld”.

The retirement sector is further complicated because some sublet fees are contributions to the contingency fund and some are set at one per cent of market price.

One family at Gibson Court, in Hinchley Wood, Surrey had to pay a sublet fee of £2,500 into the contingency fund last January.

McCarthy and Stone this month dropped the one per cent contingency charge at all sites where it is the freeholder in favour of an £80 plus VAT fee’

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

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