Retirement homes hidden exit fees investigation

Office of Fair Trading (OFT) closed consumer enforcement case.

31 March 2014

Although the OFT closed its formal industry-wide investigation in April 2013, it wrote to a number of businesses drawing their attention to its findings report (published in February 2013) and in particular the general principles it expected all landlords to comply with if they made use of transfer fee terms.

Subsequently a number of businesses confirmed to the OFT that, whilst they did not agree with the OFT’s views and believed that their transfer fee terms did not breach the Unfair Terms in Consumer Contracts Regulations 1999, they had already voluntarily made changes, or were making such changes, to how they enforced such terms in the leases of retirement home properties. Details of these businesses and a summary of the main changes they have voluntary made are summarised here.

9 April 2013

The OFT has now written to the remaining businesses whose cases it placed ‘on hold’ earlier in its investigation, drawing their attention to the OFT’s published findings report and in particular the general principles it expects all landlords to comply with if they make use of transfer fee terms. The OFT reserves the right to consider whether to take action against a landlord under the Unfair Terms in Consumer Contracts Regulations 1999 should they not abide by these general principles, in light of all the facts before it, current overall priorities and appropriate legal considerations.

Although the OFT has now closed its formal industry-wide investigation, it will keep the sector under review in order to monitor compliance with the undertakings given by some landlords, and will have specific regard to any new evidence or changes in the law that may arise.

1 February 2013

The OFT has published a report on the findings of its investigation into retirement home transfer fee terms. The report sets out a number of general principles the OFT would expect all landlords to abide by when enforcing transfer fee terms in existing leases and recommends that legislative reform be considered to address the difficulties leaseholders face in challenging the reasonableness of such fees.

Retirement home transfer fee terms - case closure information

Further information on this closed investigation is available on The National Archives website.

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