Retirement home exit fees unfair

Unfair exit fees may be levied on those living in retirement villages says the Office of Fair Trading (OFT).

The fees are charged when the purpose built homes are sold, usually one per cent of the price. OFT is concerned and has written to 26 retirement home firms regarding the content of the leasehold contracts. The small print in these allow firms to charge the fees.

The firms have been given two weeks to respond before the OFT decides how to proceed. The action was initiated after McCarthy & Stone voluntarily removed the exit fee which it charged to leaseholders.

Heather Clayton, OFT senior director of consumer protection, said: “This investigation is motivated by the need to ensure that terms and conditions are clear and fair, particularly in this sector where customers are potentially vulnerable.”

Age Concern and Help the Aged has welcomed the investigation however, they have both warned about other issues with retirement homes, such as charging over the top rents for live in warden’s apartments and charging for items not covered by the original agreement.

The charity would like the OFT to look into the retirement property sector and ensure that elderly people understand clearly what charges they are subject to when buying a retirement home.

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