A new lease of life: - CentreForum

A New Lease of Lifea grievance to tribunal. Retirement apartments are often in smallbuildings, which makes it hard to gain a sufficient critical massof support to make a case - this problem is exacerbated when aninfluential resident dies or moves out. In these ways the barriers toredress are particularly high for the most vulnerable leaseholders.Leaseholders in retirement blocks face at least two other specificproblems which they may seek redress against. First, many blocksof retirement apartments have a resident on-site manager and it iscommon for the freeholder to charge rent for this property to theleaseholders through their service charges. This adds significantcosts to elderly leaseholders. Second, it is common for retirementflat lease agreements to include a clause requiring leaseholders topay an ‘exit’ or ‘transfer’ fee when they wish to sell their homes.In some cases managing agents are connected to the freeholdersand defend the charges by saying that they are simply followingthe lease and passing the fees onto the freeholder. There have notbeen clear justifications for the fees which are usually one or twoper cent, but in some cases are as much as five per cent. There isdoubt about whether these charges are legal, to the extent that theOFT is still working on an investigation - which began in 2009 - intothe issue. 60So elderly people, many of the most vulnerable leaseholders, notonly have additional problems but also greater difficulty in accessingarbitration. These problems emphasise the need to ensure not justthat leaseholders are offered fair lease agreements and receive agood quality of management, but also that they have easier accessto redress than the current tribunal system.Case Study 3: Retirement apartmentsA retired leaseholder in Meadowbrook Court, Shropshire,challenged the reasonableness of the management feeelement of his service charges at an LVT, focusing oncharges made over a period of three years. 61 A managementfee of 22.5 per cent was levied on all expenditure in eachservice charge. The applicant argued that not only was thismore than ten percentage points more than other similarproperties, but also that this went against the Associationof Retirement Housing Managers’ (ARHM) Code of Practice,which suggested charging an annual unit fee.60 OFT, ‘OFT investigates retirement home exit fees’, Press Release, 3 September2009.61 Midland Leasehold Valuation Tribunal, Case 1736. www.lease-advice.org/decisions/8587pdf/1001-2000/1736.pdf.35