Ground Rent increases every 21 years. HELP

abi_93

Tom99 wrote: »

[FONT=Verdana, sans-serif]The lease therefore provides a route to establish the reviewed ground rent if you cannot agree. You don't quote Clause 3.2 but I would assume that clause provides for the appointment of a Chartered Surveyor to act as expert and determine the required value.[/FONT]

The Commencement Date
1 January 2002

The Rent
£125.00 per annum (subject to review)

The Term
125 years from the Commencement Date

“the Review Period”
shall mean each successive period of twenty-one years from the Commencement Date.

3.2 The amount of Rent for a specific Review Period and each succeeding Review Period shall be specified by notice served by the Lessor on the Lessee at any time within twelve months prior to the beginning of the appropriate Review Period PROVIDED THAT if the Lessee serves a counter-notice on the Lessor within months (time being of the essence) of the service of the said notice disputing such increase in the Rent then the reviewed Rent shall be either as may subsequently be agreed in writing between the Lessor and the Lessee within three months of the date of the said counter-notice or such longer period as shall be agreed between the Lessor and the Lessee or as shall be determined by a charted surveyor acting as an expert and not an arbitrator (“the Expert Surveyor”) who shall be appointed by the President for the time being (or another proper officer) of the Royal Institution of Charted Surveyors or (if he fails to appoint one within three months of being requested to do so) then by the President for the time being (or another proper officer) of the Law Society on the application by the Lessor made any time after the expiration of the final said three period (or such further period as may have been agreed between the Lessor and Lessee)

3.3. The Expert Surveyor may be requested to determine all or any of the Rents of the Dwelling in the Block together

3.4 The Lessor and Lessee shall pay in equal shares the fees of the Expert Surveyor under this clause or in the case of the Expert Surveyor being requested to determine the Rent of the Demised Premises and other Properties at the same time then the appropriate proportion of the total of the said fees
AND ALSO paying on demand by way of further or additional rent the Lessee’s Proportion.

Tom99 wrote: »

[FONT=Verdana, sans-serif]The definition of Review Value is a little vague, for example what lease term is to be assumed, is it the unexpired terms of the actual leases (now 21 yrs less) or an assumed long enough term not to reduce the likely sale price? [/FONT]

My solicitors did mention this is a vague clause. I am very torn about this clause.

ianbeale_steeplecocque

The ground rent on my flat doubles every 10 years to a maximum of 40 years. The bank originally were apprehensive about lending due to this, since my solicitors (Legal Zoom - avoid them) didn't bring it up until the very end, and then tried to get an exception just for my flat, which was obviously rejected.



It had just gone up this year to £250 per year, so I have 10 years to the next raise. With inflation, it's not quite as bad as it sounds (maxes out at £2k p/a in 2048), but some banks will be wary of any kind of clause like this when you come to sell.

Tom99

abi_93 wrote: »

My solicitors did mention this is a vague clause. I am very torn about this clause.

[FONT=Verdana, sans-serif]Yes its a little vague but it could be a lot worse. You have the fall back of appointing an Expert Surveyor who will determine the new rent for you and that includes deciding what the review clause means in terms of valuation assumptions.[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]It would be normal on sale of a new block to grant all leases starting from one standard date, even if the units were sold over a period of time, so it is likely the 2023 review date is the same in all 6 flats.[/FONT]
[FONT=Verdana, sans-serif]
[/FONT][FONT=Verdana, sans-serif]I guess the best way forward in 2023 is for the six leaseholders (or as many of them as are willing to get involved) to get together and decide whether to challenge the freeholders figure with a counter notice and then, if the further three months of negotiation do not produce an agreeable figure, to allow the Expert to be appointed.[/FONT]

[FONT=Verdana, sans-serif]50% of the Experts fee in valuing all six flat will then be paid by those leaseholders still in disagreement, obviously the more of the six who are still involved the lower the fee each will pay.[/FONT]

Warren1989

abi_93 wrote: »

My solicitors did mention this is a vague clause. I am very torn about this clause.

What did you decide about this property in the end? I have an almost identical clause and am leaning towards not worrying about it, but interested to know what you think.

need_an_answer

Warren1989 wrote: »

What did you decide about this property in the end? I have an almost identical clause and am leaning towards not worrying about it, but interested to know what you think.

you've picked on an old thread from 2018,the OP hasn't been online sine April this year so its unlikely that they will return to give you their feedback.

You might just need to rely on the advice that is currently on the thread or from anyone who has more up to date info to add going forward.