The Conveyancing Association (CA) has called for existing powers to be used to take criminal action against those who mislead purchasers into buying leasehold houses.
Beth Rudolf, director of delivery at the CA, told EYE this could include estate agents who fail to inform buyers of information that could materially affect their decision under consumer protection laws.
The CA response said: “It is worth noting that under the Consumer Protection from Unfair Trading Regulations, anyone marketing the property would be subject to criminal action if they had not made the buyer aware of the lease and the fact that the property was not exempt from the rules, at the point of marketing.”
The CA has responded to the Government’s consultation on reforming the leasehold system for houses by calling for all legal costs, and any required premium, to be paid by the seller, such as the developer, if they cannot demonstrate a mistake or mutual misunderstanding has been made in selling the house as leasehold.
It also wants the seller to also be required to enter into a deed of variation to correct the error.
Rudolph said this rule would not apply to estate agents but said they would have to comply with existing consumer protection regulations.
The CA says all managing agents and freeholders should be able to provide leasehold information within ten working days, and that the maximum fee chargeable should be between £150 and £300 to provide the full Leasehold Property Enquiries (LPE1) data, depending on the complexity of the estate.
Rudolph said: “The CA response offers what we believe are a number of practical solutions to Government which will ensure the new measures work, and that where in future houses are sold as leasehold, without the required exemption, purchasers can get the tenure changed without cost to them.
“We are keen to ensure the necessary criminal action is taken against those who mislead purchasers and do not provide the upfront information required in order for the purchaser to make an informed decision.
“At the same time, it is absolutely vital that lease administrators, for example, provide the information needed in a timely manner and at a fair cost – areas which have both been abused in the past.”