In Retirement Services (Reversions) Limited

What did we think was unfair?

This term said that when the customer died, the customer’s estate was liable for costs of the property (such as insurance, repairs and taxes) until the property was sold by the firm. However, there was no explicit obligation on the firm to sell the property within a reasonable period of time.

Why did we think it was unfair?

The term may have given the firm excessive powers to delay selling the property. As the customer’s estate was paying for the costs of the property, the firm might not have had as much of an incentive to sell the property quickly as the customer’s estate did. This meant that the customer’s estate could potentially end up paying higher costs if the firm delayed selling the property without good reason.

What has the firm done?

The firm said it already takes steps to sell properties within a reasonable period of time and has added a new term to their contract to explain this clearly to customers. The new term also gives examples of the circumstances in which they might delay the sale of the property. Term 6.6 remains.

The firm has amended their standard contract for new customers from October 2007. The firm has agreed that it will treat existing customers fairly in relation to this term. The firm will contact its affected customers to tell them about the changes by the end of August, and will also inform the estates of customers upon death.

Old term

Term 6.6: 'Between the date of Your death (or the survivor’s death if there are two of You taking part in the Plan) and the date that the Property is sold, Your estate (or the survivor’s estate) will be responsible for, and bear the cost of complying with, the obligations set out in paragraphs 12.1, 13.1, 16.1 and 17.2.'

New term

New term 6.8: 'When the circumstances in this Condition 6 arise, We will take reasonable steps to ensure that the Property is sold within a reasonable period of time. In doing this We may delay sale for any legitimate reason where We reasonably consider the selling price can be optimised by such delay. Such legitimate reasons include, but are not limited to, market conditions, expiry of any clawback period of any grant or the period for required remedy of title defects or of defects in the condition of the Property.'

What did we think was unfair?

This term gave the firm full discretion about any management, repair and maintenance of the property they thought would be necessary before it was put up for sale.

Why did we think it was unfair?

The term was not clear about whether the customer was responsible for the costs of maintaining the property. In particular, the term could have potentially required customers to be responsible for any costs of improving the property beyond the standard it was in when the contract began.

What has the firm done?

The firm has amended the term to clarify who is responsible for the costs of maintaining and repairing the property. The term also now explicitly states that the customer's estate is not liable for any costs to improve the property to a state which exceeds the standard the property was in when the contract began.

The firm has amended their standard contract to reflect these changes for new customers from October 2007. The firm has agreed that it will treat existing customers fairly in relation to this term. The firm will contact its affected customers to tell them about the changes by the end of August, and will also inform the estates of customers upon death.

Old term

Term 6.7: 'We will have absolute discretion about dealing with any management, repair and maintenance of the Property which we consider necessary pending sale.'

New term

Term 6.7: 'We will have absolute discretion about dealing with any management, repair and maintenance of the Property which we consider necessary pending sale. Where this involves costs over and above those for which Your estate (or the survivor's estate) is directly liable under these Terms and Conditions, such excess costs will be shared by You and Us in proportion to the percentage shares in the beneficial interest in the Property to which We and Your estate (or the estate of the survivor if there are two of You) are entitled in accordance with the Trust Deed. Your proportion will be paid by way of deduction from the proceeds of sale referred to in paragraph 6.4. For the avoidance of doubt, this term does not extend to your estate (or the survivor's estate) being responsible for any costs involved in improving the Property to a state which exceeds the standard the property is in when the Plan commences.'

Read more agreements from firms – see Unfair contracts.

Read more about Home reversion.

Read more about our work on Unfair contract terms.