Ground rent on leasehold

yChris

Hello everyone.

My first post here. :beer:
We are reviewing our contract and the way it calculates ground rent confused me. Can someone give me a light?

The exact sentence is..
"The Indexed Rent for a Review Date shall be determined by multiplying the Initial Rent by the All Items index value of the RPI for the month two months before the month in which that Review Date falls, then dividing the product by the All items index value of the RPI for the Base RPI Month"

I am not quite sure what does it means by "month two months". Are they trying to double the ground rent every ten years (review every ten years).

Sorry, I am not a native speaker. Our conveyancer provide terrible service and it is near the exchange date now. I can't fire her.:(

Thanks a lot.
Cheers

SeagullFTB

I'm not a mortgage advisor, but I interpreted as they would use the RPI from two months before the review date. So if the ground rent review was in June 2017, they'd use the RPI from April 2017.

saajan_12

yChris wrote: »

The exact sentence is..
"The Indexed Rent for a Review Date shall be determined by multiplying the Initial Rent by the All Items index value of the RPI for the month that is two months before the month in which that Review Date falls, then dividing the product by the All items index value of the RPI for the Base RPI Month"

Adding a couple of words might make it clearer without changing the meaning. Basically on each Review date, the rent is

Initial Rent x RPI 2 months before review date / RPI in Base month

Where
- RPI means the 'All Items' index value of Retail Price Index
- Initial rent should be defined in the lease
- Base month should be defined in the lease
- Review date should be defined in the lease

yChris

Thanks both! We will talk to our solicitor shortly.