Leasehold experts have warned the government against setting new caps on permission fees at levels that could make legitimate professional work uneconomic.
The Association of Leasehold Enfranchisement Practitioners (ALEP) welcomed plans to give the Secretary of State powers to cap fees charged to leaseholders, but says the government must distinguish between excessive charges and legitimate professional costs.
The warning follows the government’s announcement that it will consult on the scope and level of caps covering permission and administration fees.
The reforms will sit alongside plans for independent regulation of property agents, including mandatory licensing and qualifications, and further legislation on commonhold and leasehold reform.
FEE CAPS
Mark Chick (main picture, inset), ALEP Director and Senior Partner at Bishop & Sewell LLP, says: “We also welcome the news that the CLRB will contain measures to allow the Secretary of State to make regulations to cap the level of permission fees that can be charged.
“Whilst ALEP and its members do not favour excessive charges being levied for simple permissions there is a distinction between fees to receipt notices etc and those being charged ‘on top’ of professional costs when granting a licence or permission.
“We welcome the news that there will be a consultation on the level of these charges as we would have concern (as we expect those in the management space will too) that these must not make the work uneconomic.
“There is a fine line between regulation and the state control of pricing. We await further news on this.”
AGENT REGULATION
ALEP also backs the government’s commitment to establish an independent regulator for property agents, which follows recommendations made by Lord Best’s Regulation of Property Agents working group.
Chick adds: “ALEP welcomes the commitment to an independent regulator for property agents. This is in accordance with Lord Best’s recommendations and is something that ALEP has long championed.
“We are sure that both leaseholders and all reputable managing agents will welcome this news.”
REFORM BILL
Chick also welcomed confirmation that the Commonhold and Leasehold Reform Bill is expected before Christmas.
He says: “Most importantly we are glad to hear that news that the Commonhold and Leasehold Reform Bill is due to be published before Christmas. This will bring much needed certainty to the market.
“We look forward to seeing what further changes are to be added alongside the LAFRA fixes and welcome the chance to continue to work with government to ensure that the new legislation is fit for purpose.”
