Deed of Variation for error in lease

G_M

Jigglebiz wrote: »

..
But how am I meant to know who is right? Involve another solicitor? I do actually have a good one working on my purchase...

Well I wouldn't say any advice you got here would be a substitute for proper legaladvice, but

The lease contains a contradiction about the amount of ground rent payable.

a bit more information might tease out some meaningful thoughts..............................

Jigglebiz

Ok, so my sol has cc’d me into correspondence with the freeholders agent and it states that there is a discrepancy in the Lease which refers to the ground rent being £100.00 but later, in the rent review section it refers to the initial rent being £200.00.

The issue is that neither of these are actually correct now as ground rent is £72 every 6 months. Our sol and the buyers sol knows this. So I don’t know why it is even important !! It’s now the only thing preventing exchange/completion.

eddddy

Jigglebiz wrote: »

Ok, so my sol has cc’d me into correspondence with the freeholders agent and it states that there is a discrepancy in the Lease which refers to the ground rent being £100.00 but later, in the rent review section it refers to the initial rent being £200.00.

The issue is that neither of these are actually correct now as ground rent is £72 every 6 months.

If the lease says the ground rent is either £100 or £200,why do you say the correct ground rent is £72 per 6 months?

If the freeholder is demanding £72 ground rent per 6 months, it sounds like they are making a mistake.

G_M

Jigglebiz wrote: »

Ok, so my sol has cc’d me into correspondence with the freeholders agent and it states that there is a discrepancy in the Lease which refers to the ground rent being £100.00 but later, in the rent review section it refers to the initial rent being £200.00.

The issue is that neither of these are actually correct now as ground rent is £72 every 6 months. Our sol and the buyers sol knows this. So I don’t know why it is even important !! It’s now the only thing preventing exchange/completion.

a bit more information might tease out some meaningful thoughts..............................

More needed.

For the avoidance of doubt, please quote the exact wording of the lease in relation to the two contradictory sections, including headings and context.

Please also advise us in exactly what document the ground rent is claimed to be £72 every 6 months, together with the exact wording of that document.

Jigglebiz

So I have my lease here. On the front page there is a table which states
"the Rent: For the first 25 years of the Term the yearly rent of £100 and thereafter in accordance with the provisions of the seventh schedule"

p.45
"The Seventh Schedule
Provisions for review of the rent

1. For the purposes of this Schedule the following provisions have the following meanings:
1.1 'the Base Figure' means the Index Figure for the month preceding the First Review Date
1.2 'the First Review Date' means the twenty-fifth anniversary of the commencement of the term
1.2 'the Increase' means the amount (if any) by which the Index for the month preceding the relevant Review Date exceeds the Base Figure
1.3 'the Index' means the 'All Items' index figure of the Index of Retail Prices published by the relevant Ministry or Department and any successor thereto
1.4 'the Initial rent' means the sum of £200 per annum
1.5 'Review Date' means each fifth anniversary of the First Review Date
1.6 'a Review Period' means a period beginning on any Review Date and ending on the day before the next Review Date thereafter
2.1 Until the First Review date the Rent is to be £100 per annum thereafter during each successive Review Period the rent is to be a sum equal to the greater of the Rent payable under this Lease immediately before the relevant Review Date or the Revised Rent ascertained in accordance with this Schedule
2.2 The Rent for any Review Period is to be the Initial Rent plus the amount which bears the same proportion to the Initial Rent as the Increase bears to the base Figure
2.3 If the reference base used to compile the Index changes after the date of this Lease the figure taken to be shown in the Index after the change is to be the figure which would have been shown in the Index if the reference base current at the date of this Lease had been retained
..."

I can see that there are clear contradictions and yet our ground rent is £72.78 per 6 months. I assume from reading this that it has made a RPI linked increase from an initial ground rent of £100 per year - but correct me if I'm wrong!

davidmcn

So, worst case scenario is that the rent jumps up (once) by £100 + inflation? (and the past 6(?) years of underpayments could be clawed back)

That's not worth anybody paying two grand to sort out, is it? Especially if it never happens. Though now it's been pointed out to the freeholders it might be more likely to...

Jigglebiz wrote: »

But how am I meant to know who is right? Involve another solicitor?

Probably. Your current one can't (obviously) give you advice about whether they were negligent. Though not sure it's worthwhile.

Jigglebiz

No, it’s clearly not worth £1700 to sort out. But if your buyers solicitors are saying that is a condition of their client proceeding, and you have expended months on an expensive vacant property and just want rid - it may well be what you need to pay to lose the hassle!

eddddy

Maybe I'm misunderstanding (or just tired), but that piece of the lease looks ok to me....

• The GR is £100 for the first 25 years

• At 25 years the GR goes up to £200

• Thereafter the GR is reviewed every 5 years and increases with RPI

And if the lease is currently in it's 15th year, I don't understand why you agree that the GR is £72.78 per 6 months. (Are you sure it's not the £72.78 that your buyers are challenging?)

davidmcn

eddddy wrote: »

Maybe I'm misunderstanding (or just tired), but that piece of the lease looks ok to me....

• The GR is £100 for the first 25 years

• At 25 years the GR goes up to £200

• Thereafter the GR is reviewed every 5 years and increases with RPI

Ah. On re-reading it I can't see where it says that the rent goes up on the 25th anniversary. What it's saying is that on the first Review Period (the 5th anniversary of the 25th anniversary i.e. year 30) the rent will go up to £200 + the previous 5 years' RPI. What I suspect they also meant to say was that on the 25th anniversary it would go up from £100 to £200. But it looks like they didn't.

And the rent currently being £145ish doesn't compute.

eddddy

davidmcn wrote: »

Ah. On re-reading it I can't see where it says that the rent goes up on the 25th anniversary. What it's saying is that on the first Review Period (the 5th anniversary of the 25th anniversary i.e. year 30) the rent will go up to £200 + the previous 5 years' RPI. What I suspect they also meant to say was that on the 25th anniversary it would go up from £100 to £200. But it looks like they didn't.

I'd have thought 2.2 states that the rent is £200 from year 25.

Jigglebiz wrote: »

1.6 'a Review Period' means a period beginning on any Review Date and ending on the day before the next Review Date thereafter
...
2.2 The Rent for any Review Period is to be the Initial Rent plus the amount which bears the same proportion to the Initial Rent as the Increase bears to the base Figure