McCarthy & Stone has agreed to change a clause in its lease agreements after the Office of Fair Trading said it was in breach of the law.
The retirement-home developer has removed a term that charges consumers a ‘transfer fee’ of 1% of the sale price when the property is subsequently sold.
It will not enforce this rule across its existing contracts.
The OFT said this term was “likely to be in breach of the Unfair Terms in Consumer Contracts Regulations 1999”.
McCarthy & Stone said it did not agree with the OFT’s view but agreed to the change following discussions.
The OFT is to consider the issue of transfer fees with the new industry body that is being formed in response to the OFT’s Homebuilding market study.
The group will be responsible for drawing up a code of conduct and redress scheme in the housebuilding sector.
Mike Haley, OFT director of consumer protection, said: “These changes will benefit thousands of elderly and potentially vulnerable residents selling their homes.
“Moving forward, we welcome the opportunity to work with the code body for the housebuilding industry as a means to improve lease agreements across the sector.”
The OFT Home Building Study, which was published in September, cleared housebuilders of landbanking, but said the housebuilding industry would set up its own code of conduct and redress scheme to address faults in the sector, particularly unfair fees and terms in contracts.
A coalition of industry groups including the Home Builders Federation has agreed to deliver the code of conduct and redress scheme by March 2010.
