Retirement homes - exit fees - Commons Library Standard Note

Published 10 November 2014 | Standard notes SN05994

Authors: Wendy Wilson

Topic: Housing, Older people, Owner occupation, Supported housing

Some companies that own or manage retirement properties, usually flats owned on a long leasehold basis, include a clause in their lease agreements requiring owners to pay an "exit” or “transfer” fee when they wish to sell or rent out their homes. This can result in the payment of large sums of money to these firms. Owners have questioned whether this practice is legal.

Between 2009 and 2013 the Office of Fair Trading (OFT), carried out an investigation into these fees. This note summarises the outcome of the OFT investigation and potential actions for owners affected by these charges.

This note also details the Law Commission’s review of exit fees, which was referred by the Department of Communities and Local Government and started work in October 2014. The project is expected to publish final recommendations in March 2017.

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