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Event Fees – Government’s Response to Law Commission Report

  • United Kingdom
  • Real estate
  • Real estate investment


Yesterday the Government announced its response to the Law Commission’s report on Event Fees.

“Event Fees” are common in the retirement living sector. They are  fees payable on certain events such as sale, subletting or change of occupancy. 

The Government has accepted the majority of the recommendations in the Law Commission report including:

  • A new statutory code of practice which will ensure that these fees cannot be charged unexpectedly, while fees that breach it will be regarded as unenforceable.
  • 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.

Key points

MHCLG’s proposed reforms aim to reinforce existing consumer protection to ensure consistent fairness and transparency for all charges payable on retirement property lease events. 

Some key points arising are:

  • Transparency and Fairness

MHCLG wants to introduce a regime to ensure high levels of transparency so that residents can make an informed choice when acquiring properties.  It aims to achieve this by standardisation of the language used to describe the nature and types of fees and the creation of centrally administered data store of fees, supported by sanctions for non-compliance. 

  • All charges, not just event fees

Although the focus began with event fees, the Government intends for any disclosure obligations to include all charges associated with leasehold retirement properties.  This could include ground rents, service charges, management charges, sales service fees etc.

  • How will compliance be achieved?

MHCLG has suggested that there should be a third party to monitor compliance of providers.  For operators, a key question will be how they control the same level of transparency on resales of their flats by third party estate agents appointed by residents? 

Most operators are largely supportive of the tenor of these proposals.  They can give everyone involved greater confidence around the use of event fees but careful thought will be needed to ensure the proposals are workable in practice and properly reflect the range of products in the market and encourage innovation and customer choice.

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