Website Cookie Policy

We use cookies to give you the best possible online experience. If you continue, we’ll assume you are happy for your web browser to receive all cookies from our website.
See our cookie policy for more information.

Practice Areas

More Information

thepartners@wrigleys.co.uk

Leeds: 0113 244 6100

Sheffield: 0114 267 5588

FOLLOW WRIGLEYS:

Abolition of event fees

February 2018

What could this mean for co-housing & community-led housing?

We have previously written about the government's concerns that tenants of retirement complexes were being treated unfairly when they or their children came to sell their retirement flat or house.  Often, the retirement complex provider would take a large proportion of the sale proceeds – something known as an event fee.  The money was either ploughed back into the complex or added to shareholder dividends.

The government's concern was that the tenants did not appreciate how much the event fee would be and that some providers were abusing the practice in order to line their own pockets.  The government asked the Law Commission to look into the issue.

Although the initial worry was that there were unfair practices in the retirement sector, the Law Commission's ambit was to look at event fees generally.  A number of co-housing and community-led housing groups require their members to pay a proportion of the sale proceeds back to the group when they leave and this is almost undoubtedly an event fee. 

Although most groups' reasons for requiring event fees are often at least partly altruistic (e.g. as a way to subsidise younger members where they wouldn't otherwise be able to afford to buy a unit) any restrictions on event fees could have an impact on a group's ability to support itself and subsidise its members via event fees.

The Law Commission has reported back to the government and please click here for a link to their response.  The main recommendation is the introduction of an obligatory code of practice to ensure tenants are treated fairly and that information about event fees is not hidden away in the small print or only mentioned at a late stage.

Co-housing and community-led housing groups should ensure that they adhere to the principles of the proposed code of practice, even though a code has not been (and may never be) introduced.  In particular, they should ensure that members are told about event fees early on and given a realistic estimate of what level of event fees will be payable.  Groups should keep copies of all information they give tenants on the issue, in case there is ever a challenge. 

Groups should bear in mind that it may not be a member who challenges the event fee (members tend to buy into the ethos and want to put money back into the group) but it may be a child or more distant relative who inherits on the member's death.  This type of inheritor has nothing to lose by challenging the legitimacy of an event fee and potentially much to gain.

We can advise on best practice and limiting your exposure to challenges and please contact Emma Ridge or Laura Moss if you need more information.

Emma Ridge View Biography

Emma Ridge

Partner
Leeds

Inheritance Tax - What could the OTS review change?

The review of Inheritance Tax by the Office of Tax Simplification.

Click here to view more

Partner promotions at Wrigleys Solicitors 2018

Wrigleys are pleased to announce 4 promotions in the firm's Leeds office.

Click here to view more

How Can the Public Affect Your Land?

Preventing the creation of new public rights of way and town and village greens.

Click here to view more

Employment Law Update for Charities 2018

Date: 26 Jun 2018

Venue: Hilton Leeds City, Neville Street, Leeds

Further information

Employment Breakfast Briefing - 7 August 2018

Date: 07 Aug 2018

Venue: Radisson Blu, Leeds

Further information

Employment Breakfast Briefing - 16 October 2018

Date: 16 Oct 2018

Venue:

Further information

Mailing list

Receive the latest news, events and updates from Wrigleys:

Follow Wrigleys: