Paying off ground rent in full

kennyboy66_2

EdInvestor wrote: »

There are quite a lot of houses around on 999 year leases which have a peppercorn rent and no lease as they are for all intents and purposes really freehold.

Is it one of these? If so, no point in buying out the ground rent.

This really depends on what conditions the lease has. Our ground rent lease (£7.50 a year, 999 year original term) has provisions in such as

1) It is necassary to obtain the freeholders consent if you make certain alterations or extension to your property. They naturally charge for this consent - I think this would be in the low hundreds.

2) The freeholder has the right to approve choice of buidings insurance. Again they charge (£30 plus VAT)

Any purchaser of our property would have to pay fees if we ever sold.

There are hundreds of thousands of properties in the North West that were bought up by "ground rent grazers" in the 1980's.

Some (most!) of the management companies are theiving charlatans and were notorious for sending threatening forfeiture demands in the 1990's (for upto £700) if ground rent of a few pounds were overdue for just one day even if it had not been invoiced or demanded.
Or people were charged of £500 for retrospective planning consent for say a conservatory.
This was described in parliament as legalized extortion.

I think forfeiture was made much more difficult in the 2002 leasehold reforms.

£260 may not be great value for money compared with the annual charge but certainly worth it if you have similar ground rent lease provisions.

EdInvestor

MarkyMarkD wrote: »

It's NOT buying the freehold. It's buying out the ground rent liability.

Point taken. It's worth spending a few quid to remove leasehold type confusion IMHO.

How about that fellow the papers featured at the weekend who buys up manorial titles and then claims ownership/charges fees for use of grass verges,commons and foreshores.:eek:

It's really about time all these legal anomalies were sorted out.

kennyboy66_2

savingforoz wrote: »

Hi, I've just had my annual ground rent invoice (all of £3!!), along with the offer to redeem it in full for ever for £260. What are the advantages , if any, of doing this? The blurb in the letter says "Enjoy 100% control of your property" but as far as I can see I have that anyway. I am thinking of converting my house into 2 flats - would redeeming the ground rent charge help in any way?

Otherwise I think I'll go for the £3 option!

Thanks in advance.

Despite what other posters have stated this most definitley is leasehold, but sounds like long leasehold (usually 999 year original term) & when people talk about leasehold they generally are talking about flats or houses with a shorter original term (say 125 years).

Check the details of your ground rent lease but I would guess that you may find that you are supposed to get the freeholders permission if you wish to convert your house like this. They will probably charge you much more to grant this permission than the £260 charge to buy the freehold.

I'd buy it - although if you are so sure you bought it freehold you should check your original documents when you purchased the property. It is not something a solicitor is likely to have missed.

Ian_W

A puzzle wrapped in an enigma if ever I saw one, where's Richard Webster - the property lawyer who posts on here - when you need him?
My understanding of freehold is that you own the building, the land it occupies and the sky above it [though you might have difficulties charging BA for over-flying!].
If you don't own the land [if you do why would you pay a third-party ground rent?] then you must have some form of lease on it, which seems to me to make it leasehold - No?
Do post the answer when you find out why you're paying ground rent on a freehold property - it seems very puzzling to me!

EdInvestor

A solicitor writes....

(Text removed by MSE Forum Team)

Dan29

MarkyMarkD wrote: »

It's not a very common thing but it certainly affected us when we lived in Bristol and was common in that area.

It's very definitely NOT leasehold but something entirely different.

Agreed - my parents were in the same position when they owned a house in Bristol.

Here's another example, from another forum:

"How do I best go about buying out the ground rent (land freehold) for the land on which my house stands? I pay an annual ground rent to the ground landlord in the Isle of Man. The lease is 90 years from 1955.

The house building is freehold.

To sell me the freehold on the land, the ground landlord wants a price equivalent 50 times annual ground rent (plus his legal costs, quite reasonably).

I think a multiple of 50 times ground rent is excessive."

Unfortunately the person didn't get a helpful answer, but it's interesting in that it raises the distinction of the house being freehold but the land it's built on being leasehold.

Re paying it off, again I agree with what MarkyMarkD has said - but maybe some people would consider it worth it to avoid the hassle of writing a cheque once a year?

MarkyMarkD

What an interesting subject.

The Government Office for the North West http://www.gos.gov.uk/gonw/PeopleSustainableCommunities/Housing/Rentcharges/?a=42496 has a service which redeems your rent charge (apparently the term for ground rent in the north of England) without any costs other than a straight multiple of the rent charge - 17x for less than 60 years to run.

It would be worth searching on "rent charge" in your area if you are not in the North West of England.

Their information points out that these rent charges are sometimes confusingly called "ground rent" - as mine was in Bristol - even though "ground rent" normally refers to payments due on leasehold properties.

savingforoz

I will report back after I've phoned the ground rent agents today. I will also check my title deeds and check with the Land Registry, but (at present) I am 100% sure that I own the freehold of the property. I believe that this is probaby just an anomaly in the Bristol area.

savingforoz

Just checked with the Land Registry - the house is definitely freehold. So as the freeholder I don't need permission to convert my house into plans, other than planning permission, obviously. So I'll call the ground rent agents at lunchtime and see if they can come up with any sensible reason why I should pay this charge. There's certainly nothing on their website. I still think MarkymarkD has come up with the right answer about all this. But thanks to everyone who has taken the time to reply. Will report back later!

kennyboy66_2

MarkyMarkD wrote: »

What an interesting subject.

The Government Office for the North West http://www.gos.gov.uk/gonw/PeopleSustainableCommunities/Housing/Rentcharges/?a=42496 has a service which redeems your rent charge (apparently the term for ground rent in the north of England) without any costs other than a straight multiple of the rent charge - 17x for less than 60 years to run.

It would be worth searching on "rent charge" in your area if you are not in the North West of England.

Their information points out that these rent charges are sometimes confusingly called "ground rent" - as mine was in Bristol - even though "ground rent" normally refers to payments due on leasehold properties.

Thanks for that MarkyMarkD - I hope the OP's rent charge falls into this category - its sounds like there is a statuatory right to buy at a reasonable price in these cases.

Does anyone know if there is similar valuation provisions for buying out true ground rent charges on long leasehold properties ?