Help Please! Ground rent woes.

Riddley_2

Hi all, I'm negotiating the purchase of my first property, a leasehold flat. We've found that the lease contains an onerous ground rent clause which will make the annual GR unaffordable (£2,000 or more) when it is next increased, and we have asked the seller to sort out this problem. The lease itself is nice and long, with 96 years remaining.

The seller is now planning to negotiate an "informal" change to the lease with the freeholder. I would have preferred him to serve a Section 42 notice, but I imagine he's scared by the cost. The online calculator estimates the cost of a Section 42 lease extension at a whopping £15,000, and I suspect it could be more.

My question is, what are the seller's chances of negotiating a new lease that actually solves the problem? Most of the online advice is about poeple extending their leases, whereas here we mainly just want to get rid of the ground rent clause. If he spends ages negotiating an then presents us with a new lease that's no better than the old one, it's a waste of time.

Thanks!

csgohan4

I think the lease length is the least of your problem, but the uneconomical ground rent clause is a bigger concern.


I would walk tbh, developers will need to know those kind of terms are unacceptable. Some double ground rent every 10 years.

HouseBuyer77

The freeholder may agree to change the ground rent increase terms, in return for an up-front sum to compensate them for the lost profit.

I'd expect them (the vendor) to then refuse based upon the cost.

However if they've got a particularly nasty ground rent increase term they may find they have to in the end or sell at a greatly reduced price (for one thing certain ground rent increase conditions will make a property hard or impossible to mortgage). Could take them a while to come to this realisation though.

What exactly is the clause? Those that cause doublings, say every 10 years, are bad news. Doubling on a longer term is more acceptable (e.g. 30 years, this is roughly equivilent to 2.4% a year).

I've also heard of clauses that reset the ground rent based upon the the purchase price. Is it one of those?