Ground Rent gone up by 100%

glb

Irratus_Rusticus wrote: »

You fetch a form from the land registry website and apply for a copy for I think only £7 - it isn't the leasehold tenure title that you can also download for £3. Check the gumph your conveyancer gave you when you bought as it might be in there. It's a fairly long document with plans. Full of important information you ought to know.
{Wow - three replies while I was typing mine!}

Thanks I will search again through my paperwork. Where I live has recently had a new tram line put in place so I suspect they will say the house prices have gone up (which they have I purchased for £85,00 and they are up for sale for £130,00 (I've not googled how much they have sold for) so it sounds like that will be the reason why... At least I have all you lovely people that understand it and are able to explain it in simple terms. Thanks again I appreciate it and feel slightly more calm now but still a bit miffed....

TrickyDicky101

glb wrote: »

That would imply I knew I what I was doing - first time buyer! Thanks though :-)

It's also something your solicitor should have advised you about, although this isn't much use to you now.

The solicitor should have provided you with a truckload of documentation after your purchase completed - you should have a copy of the lease in there.

The lease forms a contract. If escalation clauses are present then you have agreed to the contract and thus the clauses. I do not believe a LVT would overturn this legally binding contract.

ognum

glb wrote: »

Thanks I will search again through my paperwork. Where I live has recently had a new tram line put in place so I suspect they will say the house prices have gone up (which they have I purchased for £85,00 and they are up for sale for £130,00 (I've not googled how much they have sold for) so it sounds like that will be the reason why... At least I have all you lovely people that understand it and are able to explain it in simple terms. Thanks again I appreciate it and feel slightly more calm now but still a bit miffed....

Ground rent cannot rise simply because the value of the property has risen.

The lease will clearly state how/when a ground rent rise can be imposed.

Please get a copy of your lease.

Doozergirl

ognum wrote: »

Ground rent cannot rise simply because the value of the property has risen.

The lease will clearly state how/when a ground rent rise can be imposed.

Please get a copy of your lease.

This.

The ground rent and any increases are set out clearly in the lease. They are not subject to change on a whim.

ThePants999

I'm pretty confused, though - if this truly was a rent increase, surely you'd get one larger invoice. Two £100 invoices sounds like an administrative error to me.

andybenw

Get your lease immediately. It is entirely possibly your ground rent doubles every ten years. Any ground rent increases will be detailed in your lease. Lease extensions and buying the freehold take ground rent into consideration. Lucky for you the initial ground rent was £100 not £400 or £500. But even so consider the following.

10......100
20......200
30......400
40......800
50......1600
60......3200
70......6400
80......12800
90......25600
100....51200
110....102400
120....204800

Richard_Webster

If it does double every ten years and your solicitor didn't cleartly tell you this - and warn you the risks of buying the flat - then you may be able to sue him for negligence. Ask him to prodice a copy of his report that explained the position to you.

However as others hav siad the important thing is to find out exactly what the lease says asa that will say how the rent can be increased.

davidmcn

ThePants999 wrote: »

I'm pretty confused, though - if this truly was a rent increase, surely you'd get one larger invoice. Two £100 invoices sounds like an administrative error to me.

Yes - do the invoices say which periods they relate to? Are you sure they've received your payment and that it hasn't just crossed in the post? If it's gone up to £200 a year, they're unlikely to invoice you £100 in December and £100 in January.

princeofpounds

Ground rent escalators are often misinterpreted.


Do remember that they are nominal figures, not inflation-adjusted 'real' figures - for example, using andybenw's table above 204k pounds in 120 years sounds like a lot of money, but by that point a cup of coffee might cost a hundred pounds. (That's not a real estimate, just making a point).


The second important point is that when you renew your lease, the way ground rent is treated can change. You have a right to extend your lease by 90 years under the LVT process, for example, which is a bit of a legal hassle but you have a right to do it and the process will work, and you will pay peppercorn ground rent after that.


So all this stuff about running away is nonsense. Look at the lease-advice.org website for more information; it's a government-funded advice service, you can even call them if you like - they are quite good on the basics.

TrickyDicky101

princeofpounds wrote: »

The second important point is that when you renew your lease, the way ground rent is treated can change. You have a right to extend your lease by 90 years under the LVT process, for example, which is a bit of a legal hassle but you have a right to do it and the process will work, and you will pay peppercorn ground rent after that.

I'm sorry but this just isn't relevant - one element of the cost you will pay in renewing the lease (no matter what the remaining lease term is) is what the GR is and what it will be over the course of the lease.


Just because you renew lease via LVT/buy out your freehold does not mean you avoid the GR and future GR enshrined in your existing lease. You just pay it sooner (subject to time value of money ie discounting).