ARCO backs CMA stance over lack of fee transparency

Michael Voges, ARCO executive director

The Associated Retirement Community Operators (ARCO) has backed the Competition and Markets Authority (CMA) for criticising unjustified and untransparent fees levied on leaseholders.

ARCO, which represents providers of housing with care for older people in the UK, has been calling for more transparency in all fees and charges, a commitment shared by its members through its consumer code and standards framework. However, such standards do not exist in all sectors.

As part of a probe, the CMA has said it is concerned leasehold homeowners have been unfairly treated and prospective buyers misled by housing developers.

Concerns cover ground rents, cost of the freehold, misleading information and unreasonable fees.

The CMA is set to launch direct enforcement action against companies it believes have broken consumer protection law. This could result in firms signing legal commitments to change how they do business. If they fail to make the required changes, the CMA could act through the courts to make them comply.

It will continue to work with the government on its reform plans for the market, including supporting the move to ban the sale of new leasehold houses and reduce ground rents for new leases to zero.

As part of its work, the CMA is also developing consumer advice for people who own, or are looking to buy, a leasehold property. This will offer tips on what they can do when faced with permission fees and service charges they consider unjustified.

ARCO has also called for a new alternative to leasehold for the retirement community sector, which would provide consumer protection, transparency and flexibility to adapt to residents’ needs and preferences for services and care over time.

Michael Voges, ARCO executive director, said: ‘Leaseholders need full transparency on costs and charges, and it is time to look at how this can be enforced throughout the existing leasehold system. At the same time, we would urge the government to look at how alternatives to the leasehold system could provide a dedicated framework for clarity and consumer protection in the retirement community sector.’