Bought new leasehold house - invoiced for back dated ground rent.

beastman

Are there any ground rent/leasehold experts on?
I bought a house on the 15th January and the annual £150 ground rent is meant to be billed in advance to the owner with the due date being 1st January.

We could have exchanged contracts/completed late last year but as it was the move was delayed. The previous owners were probably invoiced for the 2016 annual payment in early November. As part of the move we had to pay a one off fee of £160 fee to the freeholders (Landlords's fee for Notice of Transfer). That is all part of the rip off but that would seem to be a way for the landowner to cover any losses on unpaid annual ground rent when someone moves and fails to pay. So we have already paid £160 to them and they want an extra £150 for rent which should have been paid for by the owners at the time. (In addition we paid the solicitors a £125 leasehold supplement fee for their work on this leasehold document – so this is coming to £435!).

According to the advice online article by Shelter, which states clearly about ground rent invoices, that the notice must include:

The date on when payment is due,

If the demand is sent after the due date that's specified in your lease, the notice should include the date when it should have been paid.

The due date for payment given in the demand must be between 30 and 60 days after you receive the demand and must fall after the ground rent would have been due under the lease.

Source: http://england.shelter.org.uk/get_advice/leaseholders_rights/ground_rent

So the first obvious point is there is no "due date" on the invoice and that alone I believe renders it a "speculative invoice". The company that have sent the invoice are fully aware that the previous owners have moved and unless I am mistaken they are just trying it on. Also the invoice does not "include the date when it should have been paid". Also the 30 to 60 days, I interpret as meaning that they must give that much notice period before the annual fee is due (which is 1st January as I've checked the leasehold document states that is the rent payment date and that it is "payable in advance") so the previous owners were almost certainly invoiced for this in November so that THEY were responsible for this annual fee.

So can anyone here confirm that I shouldn’t pay this invoice and that there are no legal grounds for me to be obliged to pay it?

thanks in advance

marksoton

What did your solicitor advise prior to purchase?

davidmcn

beastman wrote: »

I bought a house on the 15th January and the annual £150 ground rent is meant to be billed in advance to the owner with the due date being 1st January.

we paid the solicitors a £125 leasehold supplement fee for their work on this leasehold document

And what did your solicitors say about the rent due on 1 January? I would have expected them to have ensured that the sellers had paid, one way or another.

HouseBuyer77

I don't know for certain but I suspect you are liable for the unpaid ground rent.

However as part of the process of purchasing the leasehold your solicitor should have made enquiries as to any outstanding rent. So if your vendor stated there was no outstanding rent when there was then they will need to give you the money for it.

Alternatively if your solicitor failed to ascertain whether or not there was any outstanding ground rent then perhaps you can sue them to cover it.

As a first step I'd go back through the purchase paperwork and see if there's anything about outstanding ground rent. Then you need to call your solicitor and ask them about it.

Angie_B

beastman wrote: »

The previous owners were probably invoiced for the 2016 annual payment in early November. As part of the move we had to pay a one off fee of £160 fee to the freeholders (Landlords's fee for Notice of Transfer). That is all part of the rip off but that would seem to be a way for the landowner to cover any losses on unpaid annual ground rent when someone moves and fails to pay. So we have already paid £160 to them and they want an extra £150 for rent which should have been paid for by the owners at the time. (In addition we paid the solicitors a £125 leasehold supplement fee for their work on this leasehold document – so this is coming to £435!).

According to the advice online article by Shelter, which states clearly about ground rent invoices, that the notice must include:

The date on when payment is due,

If the demand is sent after the due date that's specified in your lease, the notice should include the date when it should have been paid.

The due date for payment given in the demand must be between 30 and 60 days after you receive the demand and must fall after the ground rent would have been due under the lease.

Source: http://england.shelter.org.uk/get_advice/leaseholders_rights/ground_rent

So the first obvious point is there is no "due date" on the invoice and that alone I believe renders it a "speculative invoice". The company that have sent the invoice are fully aware that the previous owners have moved and unless I am mistaken they are just trying it on. Also the invoice does not "include the date when it should have been paid". Also the 30 to 60 days, I interpret as meaning that they must give that much notice period before the annual fee is due (which is 1st January as I've checked the leasehold document states that is the rent payment date and that it is "payable in advance") so the previous owners were almost certainly invoiced for this in November so that THEY were responsible for this annual fee.

So can anyone here confirm that I shouldn’t pay this invoice and that there are no legal grounds for me to be obliged to pay it?

So, you moved on the 15th January 2016 and think you are not liable for the ground rent for the year 2016? Why? Do you not own the property during 2016?

Usually, the way this works with leasehold is the ground rent and service charge are apportioned between the vendor and buyer for the time each of them owned the property during that year.

In your case, the two weeks of the year that the sellers were living in the property amounts to £5.77 - it will cost you more than that to get your solicitors to even send a letter to try to claim this back from the sellers - I would just write it off if I were you. Yes, it should have been paid by the vendors at the time they owned the flat (although you still would have needed to pay the £144.23 apportioned to you for the rest of the year) but leasehold debts stay with the property, not the person under whom the debt was acquired, therefore your solicitor should have had an up to date service charge and ground rent statement at the time of completion and ensured you were not inheriting any historic debt.

The £160 one-off Notice of Transfer is irrelevant and is certainly not in place of the £150 ground rent charge. I assume you would like your name registered as owning the property by the Freeholders, as this is what the Notice of Transfer is. It will be the same for your buyers if/when you sell the flat and is just one of the parts of buying leasehold I am afraid.

Also, the additional cost to your solicitors is for the additional work and forms they have to fill in to deal with a leasehold property. Also irrelevant to the bill for ground rent.

Service charge, ground rent and sinking funds/major works bills are all part of owning a leasehold flat - did your solicitor not bring these to your attention before you completed?

beastman

thank you for the replies, some very useful information there. I was hoping though that someone might have been able to confirm the points re Shelter's advice.

Angie B - your point about not paying the rent for 2016 when I am living there for almost all of the year does sound totally relevant but isn't the point more relevant that the annual payment which is meant to be paid in advance and clearly when I was not the owner? Also putting it another way, maybe this is how it is done but it sounds unlikely, say I had bought the house in on 1st March 2015 would the seller (who would have paid that years GR in full by then) request a pro rata payment back for the 10 months of the year that they weren't there?

Although this isn't directly relevant, my wife dealt with almost all of this and the seller's left the house in a right state with contaminated rubbish bins and rubbish all over the house and even left a broken aerial in the loft which was an added insult as the there was no aerial connected to the house (against the fixtures and fittings document!). In addition the various ground rent fees were not advised right up until the last minute (yes my wife and I should have checked!). My wife didn't wish to challenge anything as she thought it might risk the sale not completing.

Just to clarify the solicitors did address this issue (sorry did not post this as my initial post was long as it was but also I wanted to clarify if I was still legally obliged to pay an old outstanding bill) but my wife did not query it at the time. The sellers gave us a small payment (£6 or £7) in for their portion of the GR. However this was not explained properly to my wife that we would then be liable for the 2006 GR. I think the solicitors, bearing in mind they were paid a £125 leasehold supplement fee for their work on this leasehold document, have not done a fair job as the main letter they sent to us dated 21st December stated that the ground rent "has been paid up to date". The sellers clearly would have had the invoice for 2016 in their hands at this time for several weeks. Surely they should have made the 2016 GR issue more clear - we weren't even told when the GR was due. Had we known the GR was due on 1.1.16 when buying the house on 15.1.16 I assume we would have expected the owner to have just paid the bill in full.

Maybe I have it all wrong, but I feel somewhat stitched up over the circumstances of this and if I can avoid this payment legally then clearly this is what I would like to do.

thanks again for the advice given so far - feel free to call be a wally if I'm totally wrong!

davidmcn

beastman wrote: »

Maybe I have it all wrong, but I feel somewhat stitched up over the circumstances of this

Not sure why you think stitched up - it's a leasehold property, there's rent to be paid. The sellers have already given you their share of the amount due for this year, so now you need to pay the bill. Yes, maybe your solicitors could have communicated better, and yes, maybe the rent demand isn't technically competent (but I'm sure they'd eventually send you a correctly-worded demand and then you'd need to pay that).

marksoton

beastman wrote: »

thank you for the replies, some very useful information there. I was hoping though that someone might have been able to confirm the points re Shelter's advice.

Angie B - your point about not paying the rent for 2016 when I am living there for almost all of the year does sound totally relevant but isn't the point more relevant that the annual payment which is meant to be paid in advance and clearly when I was not the owner? Also putting it another way, maybe this is how it is done but it sounds unlikely, say I had bought the house in on 1st March 2015 would the seller (who would have paid that years GR in full by then) request a pro rata payment back for the 10 months of the year that they weren't there? Yes

Although this isn't directly relevant, my wife dealt with almost all of this and the seller's left the house in a right state with contaminated rubbish bins and rubbish all over the house and even left a broken aerial in the loft which was an added insult as the there was no aerial connected to the house (against the fixtures and fittings document!). In addition the various ground rent fees were not advised right up until the last minute (yes my wife and I should have checked!). My wife didn't wish to challenge anything as she thought it might risk the sale not completing. Irrelevant, as you say...

Just to clarify the solicitors did address this issue (sorry did not post this as my initial post was long as it was but also I wanted to clarify if I was still legally obliged to pay an old outstanding bill) but my wife did not query it at the time. The sellers gave us a small payment (£6 or £7) in for their portion of the GR. So it was pro rated...However this was not explained properly to my wife that we would then be liable for the 2006 GR. I think the solicitors, bearing in mind they were paid a £125 leasehold supplement fee for their work on this leasehold document, have not done a fair job as the main letter they sent to us dated 21st December stated that the ground rent "has been paid up to date". The sellers clearly would have had the invoice for 2016 in their hands at this time for several weeks. Surely they should have made the 2016 GR issue more clear - we weren't even told when the GR was due. Had we known the GR was due on 1.1.16 when buying the house on 15.1.16 I assume we would have expected the owner to have just paid the bill in full. That's an issue between you and your own solicitor...

Maybe I have it all wrong, but I feel somewhat stitched up over the circumstances of this and if I can avoid this payment legally then clearly this is what I would like to do.Maybe, but by your own legal people not the vendor...

thanks again for the advice given so far - feel free to call be a wally if I'm totally wrong!

How did you come to choose this solicitor?

Running_Horse

A leasehold house. What a quaint concept.

SmlSave

You haven't been stitched up and it sounds like your solicitor did their job. I think you've just got it in your head that you didn't need to pay anything more and want to blame someone.

Pay it and move on.

alchemist.1

Running_Horse wrote: »

A leasehold house. What a quaint concept.

Welcome to the North.