Note: This advice is given by the CAP Executive about non-broadcast advertising. It does not constitute legal advice. It does not bind CAP, CAP advisory panels or the Advertising Standards Authority.
Length of Lease
In 2014, the ASA received a complaint about an ad for a property which stated "Tenure: Leasehold". The complainant challenged whether the ad was misleading because it did not make clear the length of the remaining lease. In its response, the advertiser said they believed that the ad complied with the requirements set out by their industry body, and that the length of lease would be made available to any customer who enquired about the property. They also considered that the length of the remaining lease was unlikely to be of concern to a potential buyer.
The ASA noted that the number of years left on a lease could affect one’s chances of obtaining a mortgage, could impact any potential resale of a property and that majority of lenders were likely to refuse a mortgage if the lease had between 50 and 75 years remaining. A small number of lenders might refuse mortgages if the lease had fewer than 95 years remaining. In this case, the ASA did not uphold the complaint because the number of years remaining, 101, was considered to be sufficient (Chesterton Global Ltd, 26 November 2014).
In light of this ruling, CAP advises that advertisers make clear the number of years remaining on a lease if it is fewer than 95.
Lease renewal costs
The ASA investigated a complaint that a website ad for a shared ownership property misleadingly omitted information relating to the costs of extending a lease, particularly once there were fewer than 80 years remaining. It ruled that, given that the site had dedicated sections relating to costs involved, the ad could and should have made clear that those costs could be significant, and could increase as the lease length reduced. (Keaze Ltd, 21 September 2022)
Service Charges
Service charges are compulsory, ongoing fees that may be payable on retirement homes, leasehold properties and sometimes on freehold properties, usually for maintenance costs.
The ASA upheld complaints that the omission of service charge costs in an ad for retirement homes was misleading ruling that the price of the service charge was material information of which consumers should also have been made aware. Because the service charge was a non-optional fee which had been excluded from the ad, and because the ad did not make clear that it was excluded or how the charge was calculated the ad was found to be misleading (Pegasus Homes Ltd 13 November 2024).
See Property: Shared Ownership, Property: Fees and VAT