24 May 2024
The Bill defines event fees in relation to a new lease being granted, assigned or terminated and with the amount calculated by a method determinable in advance.
Event fees are used by operators of modern housing-with-care schemes for older people to enable residents to pay for services and facilities by making use of their housing wealth. They are paid as a percentage of the sale price when an apartment is sold.
However, despite their growing use in specialist housing, event fees had until now lacked a formal definition in legislation – which had also held back the development of dedicated consumer protection regulation for event fees.
Michael Voges, Chief Executive of ARCO, said:
“ARCO has long campaigned for dedicated consumer regulation for event fees. The first step was to define event fees in law and we are delighted that has now happened.
The next government must build on this progress by adopting the Law Commission’s proposals for a code of practice in order to stamp out non-disclosure of event fees in retirement housing.
The government’s decision to give legal definition to event fees and throw its weight behind them will give confidence to consumers, operators and investors about the use of event fees, and will help to unlock badly needed new provision of specialist housing.”
The Leasehold and Freehold Reform Bill received Parliamentary approval as part of the ‘wash-up’ process of outstanding draft legislation prior to Parliament being dissolved for the General Election.
When the definition of event fees was incorporated into the Bill, the government also set out its view that event fees are generally to be regarded as fixed service charges, providing further clarity to the sector.
Event fees are widely seen as critical to improving the affordability of specialist housing for older people – in particular, for ‘asset-rich, income-poor’ households - who may otherwise struggle with the ongoing living costs of living in modern housing-with-care schemes, known as Integrated Retirement Communities, which include 24-hour onsite support, restaurant facilities, gyms and extensive communal facilities.
For more information, please email policy@arcouk.org
