Pressure is increasing on agents and portals to ensure leasehold terms are spelled out in all property listings, amid concerns that there will be a government crackdown on mis-selling.
IT professional and blogger Peter Ellis Jones analysed 1,041 recent listings of new-build properties in London on Rightmove.
He found that most – over 80% – did not show the years remaining on the lease, the service charge or the ground rent.
He highlighted that this is against the Consumer Protection from Unfair Trading Regulations 2008 which require agents and developers to disclose any material information that could “impact on the average consumer’s transactional decision”.
The Property Ombudsman’s Code of Practice also says material information when it comes to leaseholds must be disclosed.
Ellis Jones said: “Estate agents will argue that buyers should do their own due diligence when buying leaseholds, but it is naive to expect buyers – especially if it’s their first time – to be aware of all the obligations they are taking on when signing a leasehold.”
He told EYE: “Rightmove really needs to step up and do a better job here. As a monopoly with a huge chunk of the market it is in a unique position to demand that buyers be treated more fairly.”
Rightmove has said it provides an option for agents to enter tenure terms on listings, but leasehold campaigners have called for inclusion of these details to be mandatory.
The portal also said it has added more information about the differences between buying a leasehold and freehold property to help prospective buyers.
However, while there are 13 articles on the Rightmove blog related to leasehold, the most recent is last April about what buyers need to know about owning a leasehold.
A Rightmove spokesperson confirmed this is its latest leasehold guide but said another was being worked on that looked at extending leases for flats.
https://peterellisjones.com/posts/the-terrible-lack-of-transparency-in-rightmove-ads-for-leaseholds/
If was standard practice to put the lease details in the bullet points of property particulars- the material information required of agents would be met.
With the emergence of the next generation of property search that allows property features to be searchable, to include and exclude properties from search, it makes sense that properties with compounding profit leases can be removed from search results and set them apart from traditional leases that are designed to cater for properties that have communal reliance and responsibilities.
Bullet points are already included in portal data feeds so it is simply a case of agents including information that ultimately will have to be disclosed if a sale is to complete.
The real issue in implementing a solution that already exists is many agents aren’t aware of their obligations to disclose material fact, some wouldn’t know it is material fact, and some will rely on few CP and BP regulations covering the industry are policed effectively and simply don’t bother.
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Easy enough for Rightmove to make certain information mandatory.
All rather late in the day and you have to wonder what the Competition & Mergers Authority will do about the years of failure that appears to still be going on. When they were handed the task of investigating the matter they said that the Parliamentary Committee had indicated there were up to 100,000 leases with onerous terms.
Given that leases can say anything and are often complicated the only real way to provide all material information is to include a copy of the lease and suggest expert advice is sought.
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Actually it isn’t easy enough to make it mandatory- it would require a mandatory field to be included in each of the agency CRM systems, some of which are 20 years old and don’t have the coding staff, resources, time or desire to amend (often legacy) database systems.
If you are looking to make an industry wide- no excuses, change to material information being displayed, use the technology and systems that already exist as the solution you’re after. Push for; tenure, lease term, ground rent etc to be entered into the feature/bullet points and they will be fed through to all of the portals. It is then easy for consumers (those affected) to report any agent not including tenure details (in the same way as all properties must display EPC data)
Agents have nothing to gain from withholding tenure and lease details, it is beneficial they’re not agreeing sales that will ultimately fall through. It might cause some issues listing some properties that have onerous condition leases but that will be a matter for the vendors and the agents they’re able to use.
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>Actually it isn’t easy enough to make it mandatory- it would require a mandatory field to be included in each of the agency CRM systems, some of which are 20 years old and don’t have the coding staff, resources, time or desire to amend (often legacy) database systems.
I don’t think that’s an excuse and it is easy for Rightmove to make it mandatory just Agents will have to change the way they do things. To say they haven’t the desire to make these changes is a disgrace considering the amount of mis-selling that has gone on leaving many people trapped with what are essentially toxic leases. Shame on you.
By missing off these details over the years Agents have saved time and effort. Time is money. So yes they do it for gain.
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For the 25 years I have been doing tech for agents trust me that is not an excuse but the reason what you are suggesting will not work.
Someone has got to spec out what should and shouldn’t be manadtory, someone has got to disseminate that to about 90 CRM suppliers who would have to code and test a change to their system, then when thats done all the portals have to police what is already legislation that is not being policed by an authority already paid to police it.
CPR legislation already does what you want it to do; “include all material information” you might be best lobbying NTSEALT to enforce legislation that aleady exists.
Try asking NTSEALT to issue a directive (via the redress scheme they control) to include tenure details in the bullet points of property particulars. That would put mandatory material information into fields that already exist in the main agency CRM systems and be pubished without any changes to any portal.
If any consumer finds an agent not displaying tenure details they have an existing system of reporting breaches of CPR to trading standards.
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The only thing that is mandatory is that all material information needs to be disclosed.
The only way this can be done unless somebody with strong leasehold law experience reads through the lease thoroughly and lists any issues is to provide a copy of the lease. Not even conveyancing solicitors have this experience and even if they do they don’t budget for the time to scrutinise the lease from front to back..
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