‘In perpetuity’ leases

10.12.2015

Question for written answer E-015621-15
to the Commission
Rule 130
Derek Vaughan (S&D)

One of my constituents has brought to my attention the issue of ‘in perpetuity’ leases on timeshares, i.e. an arrangement whereby a lessee rents out a property for a fixed number of weeks in the year. In perpetuity leases are where the property is leased on the basis of a contract that will continue even after the decease of the contracting party, and potentially continue forever. This form of lease is often poorly advertised and the legal ramifications of signing unclear. These are often very severe, for instance the company may have no duty to buy back the property and the duty of payment may be passed on to the beneficiaries of the will, even if they have no desire to inherit the lease. These regulations can be exploited by unscrupulous landlords to sell perpetual leases and then simply collect the revenue, regardless of the lessee’s desire to terminate the lease.

In light of these problems, does the Commission have any plans at the moment to propose legislation in the area of perpetual leases, so as to better regulate this practice?