The Competition and Markets Authority has opened enforcement cases against Barratt Developments, Countryside Properties, Persimmon Homes and Taylor Wimpey in connection with the sale of leasehold homes.
The CMA said the action came after it “uncovered troubling evidence of potentially unfair terms concerning ground rents in leasehold contracts and potential mis-selling”.
The CMA’s action is focusing on potential mis-selling by the housebuilders, including the alleged failure to explain ground rents, misleading over the availability of freehold properties and the cost of freeholds, as well as unfair sales tactics.
The investigations by the CMA will also focus on unfair contract terms with regards to ground rents.
In addition, the authority is exploring ground rent increases based on the Retail Price Index and may take enforcement action if evidence of unfair practices is discovered.
If the cases are proven, the firms could be taken to court or required to make legal commitments to change the way they do business.
CMA chief executive Andrea Coscelli said: “It is unacceptable for housing developers to mislead or take advantage of homebuyers. That is why we have launched today’s enforcement action.
“Everyone involved in selling leasehold homes should take note: if our investigation demonstrates that there has been mis-selling or unfair contract terms, these will not be tolerated.
“Alongside its enforcement action, the CMA is also sending letters to a number of other developers, encouraging them to review their practices to make sure they are treating consumers fairly and complying with the law.”
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