Ground rent review clause

mrtn

Hi all

I am reviewing a ground rent review clause in my lease and looking to get your opinion on the actual way of calculating it. The clause says:

The Ground Rent hereby reserved shall on each of the Review Dates be adjusted either upwards or downwards (but subject to the Ground Rent never falling below the actual amount of the yearly rent specified in the definition of Ground Rent in the particulars hereof) by reference to any percentage change in the Index between:

1. (in relation to the first of the Review Dates) the figure published immediately prior to the term commencement date and the figure published immediately prior to the first Review Date and

2. (in relation to each of the subsequent Review Dates) by reference to any percentage change in the index between the figure published immediately prior to the previous Review Date and the figure published immediately prior to the Review Date in question

The initial ground rent value mentioned in particulars is £120 and the index is RPI.

Therefore, I would be grateful if someone could confirm if my understanding of the calculation is correct.

Hypothetical RPI values:

A. 2010 = 100

B. 2020 = 130 (up 30%)

C. 2030 = 175.5 (up 35%)

D. 2040 = 245.7 (up 40%)

The first review is straightforward:

£120 x 1.3 = £156

Am I right in thinking that the next reviews is calculated as follows? This is the part that is very unclear to me, as I can't see anywhere any reference to the current/most recent ground rent value being 'the base' for the calculation.

C. 2030 - £156 x 1.35 = £210.6

D. 2040 - £210.6 x 1.4 = £294.84

davidmcn

That seems to be correct. Basically it goes up in line with RPI.

mrtn

Thanks.

What I am trying to establish as well is the base for calculation, i.e. where does it say that I should be multiplying £156 by 1.35 and not the original £120? This part is very unclear to me.

da_rule

What does the lease describe as being the ground rent? Is it something along the lines of "£120 reviewed in line with the terms of this lease"?

mrtn

da_rule wrote: »

What does the lease describe as being the ground rent? Is it something along the lines of "£120 reviewed in line with the terms of this lease"?

Yes, pretty much:

£120 per annum adjusted pursuant to the provisions of Clause 9 hereof

Tom99

So the Ground Rent as at the date of the review is £156 as previously adjusted to by Clause 9 not the original £120.