Colleague and retirement living specialist David Hutber notes the following:

March 2019 was an important month for the retirement living sector as the Ministry of Housing, Communities and Local Government (“MHCLG”) published their response to the Law Commission’s report on event fees in leasehold retirement properties* and their recommendations for comprehensive leasehold reform.**

Many would agree that leasehold needs reforming, but with various business models present in the retirement living market not everyone in the sector agrees on what reforms should be made. MHCLG’s viewpoint is arguably the most important however, so what changes are they recommending?

Turning first to event fees, MHCLG confirmed that most of the Law Commission’s recommendations will be implemented. Those recommendations include;

  • a new code of practice;

  • standardising the information provided to purchasers; and

  • a cap on the event fee that can be charged on subletting/change of occupancy.

MHCLG indicated that whether an event fee should be charged when spouses/carers remain at the property following the death of the principal resident (the Law Commission thinks not) needs further consideration.

In terms of general leasehold reform, there has been some discussion about whether the retirement living sector should be exempt from a proposed ban on leasehold houses or ground rents. In their latest publication on leasehold reform, MHCLG suggest that it would be appropriate for the sector to be an exempted from any ban on leasehold. Their current view on ground rents in the sector was less clear, though it seems that any exemption to a ban would be subject to a cap of £250 per year.

A report commissioned by MHCLG*** states that the wider goal of the reforms to event fees is to ‘encourage growth of the retirement housing sector’. This is a positive signal and is hopefully the first step towards a statutory framework for the retirement living sector which will provide the clarity and certainty to consumers, investors and funders that is required to achieve the sector’s ambitious growth targets.

* see for the full response