The Office of Fair Trading (OFT) secured an agreement from a major builder of UK retirement apartments to amend its leases, especially in relation to the re-sale of properties.
McCarthy and Stone plc agreed to remove from future contracts, and not enforce in existing contracts, a term in its leases that involved charging consumers a 'transfer' fee of 1% of the sale price when the property was subsequently sold.
The OFT considered this term was likely to be in breach of the Unfair Terms in Consumer Contracts Regulations 1999. The Company said that it did not agree with the OFT's view but co-operated with discussions and agreed to the changes. The Company has also agreed to amend various other terms.
The OFT has raised the issue of 'transfer' fees with the proposed body that will be responsible for delivering a code of conduct and redress scheme in the homebuilding industry, which has agreed to consider the matter and facilitate discussions with the industry. This body is being formed in response to the OFT's Homebuilding market study.
Mike Haley, Director of Consumer Protection at the OFT, said:
"These changes will benefit thousands of elderly and potentially vulnerable residents selling their homes. We are pleased that the changes have been accepted and implemented without the need for further action by the OFT.
Moving forward, we welcome the opportunity to work with the code body for the homebuilding industry as a means to improve lease agreements across the sector."
