Purchasing a flat with an AST

bemused90

I'm right at the end of buying a leasehold flat with a £250 annual ground rent with an RPI index. This ground rent will rise above £250 in accordance with the index in the next 6 years i.e. probably around the time I'll be planning to sell.

I've been advised by my solicitor that I'd be taking a risk buying a flat with this ground rent. This is because once the ground rent rises above £250 this lease would become an Assured Shorthold Tenancy (AST). This would give the landlord more power over the property, allowing possession of the property in the event we miss the ground rent payment by 21 days. This would also mean we don't have the right of first refusal should the freeholder want to sell the block to someone else - who I assume could demolish / start again?

I feel like the freeholder doing any of the above is unlikely but still a concern and I'm worried about how my future buyer six years down the road will feel about buying a flat with an AST.

Our sellers are adamant this is fine (unsurprisingly) and are willing to re-market the property as they have no intention of seeking a deed of variation to fix the ground rent or waiting for us to do so before exchange.

Am I being totally unreasonable? Are AST's common among flat owners? Would you be wary about buying a flat which would shortly become an AST?

theartfullodger

It's a risk: See this...
https://www.mishcon.com/news/publications/real_insights_-_property_update_05_2017/assured_tenancy_traps__the_unexpected_ast_05_2017
&
https://nearlylegal.co.uk/2018/09/when-a-long-lease-is-a-shorthold/

SmashedAvacado

this isnt a big deal at all. Pay the ground rent whether it is demanded or not, and then you have no problem. I suspect the law is going to change the position on ground rents in the next few years, but this isnt a reason to back out of a deal.