Ground Rent Raising To £4,000???

HB58

We are in a similar situation - currently purchasing a flat with nearly 125 years left on the lease. The ground rent is set to double every 25 years, it is currently £200pa.

However, we are buying a share of freehold, so I believe we do not pay ground rent? How will this affect us when we come to sell (more likely our son as we expect to live there until we pop our clogs!)?

AdrianC

If you own a share of freehold, then you DO pay ground rent (as do all the other leaseholders) - the money goes to the freeholders. So, if all the leaseholders own a share of the freehold, and everything's in proportion, then you might choose to just take your money out of one pocket and put it into another.

You could choose to sell just the lease - or you could choose to retain the lease and sell the share of the freehold.

It would probably seem sensible to grant yourselves all nice long peppercorn leases.

strawberries1

The property is a maisonette. No common areas so no service charge.

The lease was renewed (extended) only recently and as the freehold changed hands a couple of years prior they upped it from a peppercorn rent. Even notices have skyrocketted from 2 guineas to 80gbp.

Looking through the Freehold title register only two of the 20 maisonettes have been extended since the original 125 term in the 60s. They'll all have about 70yrs at this time.

I wonder why they didn't all try to buy the freehold and thereby have a share instead of falling into this type of conundrum?

anselld

It is not possible to simply increase the rent and charges unless there is some clause in the original least to allow it.

Look at the original leases which have not been renewed you may find they still have peppercorn rent and fixed charges. It may be the case that a previous leasholder negotiated a lease extension on the cheap, but at the expense of the escalating rent clause being added.

moneyistooshorttomention

Re - service charge.

At one point you say "No common areas - so no service charge". Earlier on you query as to whether the freeholder might introduce service charges in the future.

A legal bod could answer this for sure - but it's my understanding that, in law, there either is a service charge from the outset or there isn't one from the outset. That any service charge existing has to be written down in the original deeds/register entry of the place when it was first built. If there's nothing in writing down in those original deeds etc - then there isn't a service charge and one cannot be introduced subsequently.

[Deleted User]

As a footnote there is news this morning that the government are looking to outlaw these type of feudal Leases , for new houses but who knows how far it may stretch as there are apparenlty millions of Leaseholders who are stuck with short Leases and cannot afford to extend.

horseymchorseface

walk away, what you spent now pales in comparison of what you will lose through the ground rent and house price

strawberries1

Chanes wrote: »

Just to be clear those figures are not compound?

And what are the indemnities?

It seems messy.

The indemnities are for windows and the lease granting side access to garden but not shown in the plan. So either the plan is altered or indemnity runs.

nicmyles

It all depends how long you envisage staying there.

I bought a leasehold flat with an almost identical ground rent provision and time left on lease in 2012 and then sold it last year. Both I and my buyer had mortgages - lenders were unconcerned.

I knew when buying it that I was going to sell it within five years and on balance felt that the risk of the clause having any impact on me was low. Which was how it turned out.

strawberries1

nicmyles wrote: »

It all depends how long you envisage staying there.

I bought a leasehold flat with an almost identical ground rent provision and time left on lease in 2012 and then sold it last year. Both I and my buyer had mortgages - lenders were unconcerned.

I knew when buying it that I was going to sell it within five years and on balance felt that the risk of the clause having any impact on me was low. Which was how it turned out.

How many years did you have left at sale?
I'm looking at 10-15 years, so 112 or 107 years left. Still £250 at time of sale.