Property: Leasehold


INSIGHT
Published
Dec 18th '14
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In 2014, the Advertising Standards Authority (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.

 

Source: Committee of Advertising Practice (CAP)

 

Last updated: 18 December 2014

 

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 ASA. CAP’s AdviceOnline entries provide guidance on interpreting the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing.

 

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