The leasehold system is a feudal form of property ownership in England and Wales, which many investors believe is a flawed form of residential tenure, as it is the freeholder who continues to own the important underlying interest.

Many properties across the country are sold as leaseholds, with the buyer paying significant sums in the form of ground rents, inflated service charges and highly lucrative lease extensions.

To help guide homeowners, including investors, a new consumer guide on leasehold property, specifically outlining the fees and charges that may be payable to a lease administrator, has been launched by The Conveyancing Association.

The launch of the ‘Leaseholder Guide to Lease Administration Fees’ follows a considerable amount of media and consumer interest recently around issues such as escalating ground rents, leasehold new-build management fees and service charges, and the guide has been designed to cover a number of these issues, outlining the charges and helping consumers understand what they will have to pay.

The guide covers the three types of charges often associated with leasehold property, namely: ground rent; service charges; and administration charges.

Beth Rudolf, director of delivery at the Conveyancing Association, said: “Part of the major problem we see with the fees associated with purchasing, selling or owning a leasehold property is that many consumers simply have no idea about the potential charges involved and how they might escalate over time.

“We have focused strongly on the lease administrators during our leasehold campaign, working with the leasehold and legal industry bodies to reduce the instances of those who charge unreasonable fees for their services and to counter the amount of time it can take for the information to be delivered. 

“We recognise that part of the delay comes from the difficulties conveyancers experience in identifying the right person to deal with leasehold enquiries and believe a register of lease administrators could solve this. However, where the lease administrators are unresponsive or attempting to charge unreasonable fees, a redress scheme is needed so consumers have a full and transparent complaints process to utilise if they feel these charges and delays have been unreasonable.

“This consumer guide to lease administration fees is designed for prospective leaseholders, as well as those who already own a property, and those looking to sell. We wanted to outline the types of charge that can come with such a property, and in particular to look at those administration charges which are made by the lease administrators, and the current process for disputing them.

“This is all about consumer education, and with leasehold such a housing market and political hot potato at present, this should be the perfect time for conveyancers, consumer groups, and all those involved in providing advice to leaseholders, to issue this guide to ensure there are no surprises when these charges are made.”