Ground Rent- Buying a flat and it isn't mentioned in any of the paperwork.

clouiseb

Hiya,

It's my first time using MSE and my first time buying a property so forgive me if I am not doing this correctly!

I am in the process of buying a flat and the solicitor I am using has said she is unable to set out the ground rent in the paperwork. I understand that the ground rent can increase but my solicitor says she is unable to know how much the ground rent will increase by and will therefore not state how much it will be in the documents.

I am satisfied with not knowing the exact amount that the ground rent will increase by, but I don't want to sign the documents until I am confident that the ground rent will not increase to a ridiculous amount, which makes it difficult to sell the property later on. I have recently read horror stories of people who have purchased flats only for the ground rent to double every year...

If any one has any understanding of ground rent and how it is usually agreed (or if it is ever agreed) before you purchase the property, please shed some light on this for me- Any help is appreciated.

Thanks,

Claire

shopbot

Welcome to the MSE forums Claire.

Without sounding too blunt, this is exactly what you pay a solicitor for! If they cannot deal with this I would suggest changing solicitors.

I pay ground rent on my property and it is set out in my lease and was very clear from the outset.

If you do want to do some research I have found that this is the best website for leasehold matters: http://www.lease-advice.org/

davidmcn

It's not very clear from your post what the problem is - is it:

• your solicitor can't tell you what the rent currently is
• your solicitor can't explain the mechanism by which future rents are ascertained
• your solicitor can't tell you the actual amount that the rent will be in the future?

There's not much point in the rest of us telling you how ground rent is usually agreed - you need to know how it's actually agreed under your lease.

saajan_12

If it's not clear from the documents then your solicitor needs to query this with the vendor / freeholder (via the vendor's solicitor). Do not agree to exchange until you get this information.. one person's 'ridiculous amount' may be different to another's, so you essentially need to see what the exact restrictions on increases are in the lease. For example 'increase by no more than RPI every x years' or 'double every y years'.

elverson

This should be bread and butter for a competent solicitor. As above, don't exchange until you've got an answer.

Sometimes ground rent is a "peppercorn" (i.e. it's not collected in practice), in other recent examples it can be a huge amount:

http://www.bbc.co.uk/news/business-38827661

eddddy

The lease will tell you what the ground rent is, and/or how it is calculated.

Sometimes it's a straightforward number - e.g. £100 per year

Sometimes it's a formula - perhaps based on the 'Retail Price Index' (RPI) or the value of the property.


If it's a formula, for example based on RPI or property value, your solicitor will have to ask the leaseholder's solicitor what the current ground rent is, and you will have to judge what future ground rents might be.

Out of interest, how did you find your current solicitor? Are they an 'online conveyancing factory' or similar? If so, you might find them less helpful than other types of solicitor.

always_sunny

How old it's the lease? Is it a new build or an older flat?
In my lease, somewhere on page 3 where it mentions the start and length of the lease, it mentioned the yearly rent. Easy to miss.

Also, when you get the Information Pack there should be a balance sheet to confirm there is no outstanding GR passed on to you.

G_M

Have ypu got a copy of the lease? This is the document that specifies the GR. Have you read it?

If the lease does not specify an payment of GR, then there can be no demand made by the freeholder for payment.

Note: we are all assuming you are buying a property in England or Wales. Are you?

skintpaul

ground rent is usually the first item mentioned in lease deeds, after detailing the property!

if not ratified, walk away- could be other stuff due too!