CMA to investigate leasehold home sales
The Competition and Markets Authority is to investigate leasehold home sales.
It said this could lead to action against the developers and freeholders involved.
Andrea Coscelli, chief executive at the CMA, said in a letter: “We will investigate to see the extent of any mis-selling and onerous leasehold terms, including whether they might constitute ‘unfair terms’ as legally defined.
The Competition and Markets Authority is to investigate leasehold home sales.
It said this could lead to action against the developers and freeholders involved.
Andrea Coscelli, chief executive at the CMA, said in a letter: “We will investigate to see the extent of any mis-selling and onerous leasehold terms, including whether they might constitute ‘unfair terms’ as legally defined.
“We propose to use our consumer protection law powers as the most effective way of doing this, which might in due course lead to our bringing enforcement proceedings if the evidence we uncover would warrant that.”
The decision comes after a report from the Housing, Communities and Local Government committee detailing leasehold properties, with high and opaque service charges, one-off bills, permission charges and unreasonable costs to extend leases.
Committee member Clive Betts MP said: “The Housing, Communities and Local Government committee report into leasehold laid bare a system in urgent need of reform, where homebuyers are vulnerable to exploitation by freeholders, developers and managing agents.”
Betts said the committee had also heard of a number of cases where homebuyers were deliberately misled.
He added: “I am pleased that the CMA has taken positive action to understand the scale of mis-selling and onerous leasehold terms. Homebuyers need to be protected and, where evidence of mis-selling is proved it is right that the CMA take action.”
The CMA will meet the committee on 11 June.
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