The ‘event fees’ system used by elderly residents to defer payment of some of the running costs of their retirement leasehold homes until they sell them is potentially open to abuse by rogue landlords and should be regulated, urges the Law Commission following a 2-year investigation and public consultation.

Most of the time, the system helps residents to offset the service charges payable in good quality retirement housing. The Law Commission found, however, that a few rogue landlords can charge fees up to 30% of the property price without warning the owners about them until they had bought the property.

Owners may also have to pay large sums for changes to occupancy, even when a carer moves in or the owner has to sub-let to help cover the costs of a spell in residential care.

‘Event Fees in Retirement Properties’ explains the Commission’s recommendations for regulation of the sector and the introduction of a new code of practice outlining minimum mandatory standards for landlords.

The recommended regulatory changes would

  • prevent fees being charged unexpectedly
  • cap the fees charged for sub-letting or change of occupancy
  • require standardised, transparent information to be provided at an early stage in the purchase process
  • change the Consumer Rights Act 2015 so event fee terms would likely be unenforceable if landlords breach the code of practice
  • introduce protections if a resident’s partner or carer moved into the property

If the legal uncertainty around event fees is removed or reduced, the retirement leasehold sector estimate that there could be an additional £3.2 billion investment by private companies over the next 10 years to build more high-quality retirement leasehold properties.