Ground Rent doubling itself every 20 years

jumperabv3

kazzamunga wrote: »

We got a deed of variation done for a similar problem on a new-build flat bought in 2014, and it cost about £700 to do this with a solicitor.
https://pmpl.co.uk/taylor-wimpey-ground-rent-review-assistance-scheme/

Obviously we were lucky because the developer paid for it, but £700 wasn't that unreasonable anyway. I'm not sure why some people are saying it would be thousands, but maybe it's different in this case.

Thanks for the link, it says:

"You qualify if you own a house or flat with a 10 year doubling ground rent clause and you bought your property directly from Taylor Wimpey."

So I cannot use them as I didn't buy the property from TW, correct?

AdrianC

Have you actually knocked up a spreadsheet and done the maths on what double-every-20-years works out to? 25yr-doubling is effectively somewhere around inflation, lower when you take into account totals paid.

The issues are around 10yr doubling, which works out somewhere in the high single-figure %ages.

jumperabv3

AdrianC wrote: »

Have you actually knocked up a spreadsheet and done the maths on what double-every-20-years works out to? 25yr-doubling is effectively somewhere around inflation, lower when you take into account totals paid.

The issues are around 10yr doubling, which works out somewhere in the high single-figure %ages.

Yes, but if I can buy out the ground rent why not do it? It would add a significantly high value when I sell the property because the potential buyer would know he has £0.00 Ground Rent to pay per year, that makes it much better than other flats that leaseholders would continue paying it every year.

(I'm thinking about the long term).

Tom99

jumperabv3 wrote: »

Thanks Tom,
Do you have any recommendation for someone who can start the statutory process if it's allowed to ask for it in the forum? I literally know no solicitors in the UK, the one I did know unfortunately passed away from cancer a few years ago. Is it possible for example to start the process with you via messages? (it sounds to me like you're a solicitor and you're very knowledgeable).
I'm only asking if this is allowed, if not then apologies. Thanks.

[FONT=Verdana, sans-serif]No I am not a solicitor, I’m a retired chartered surveyor but my interest in this subject dates from when my children owned leasehold flats.[/FONT]

[FONT=Verdana, sans-serif]Your 1st port of call should be to appoint a chartered surveyor to give you valuation advice on the premium you might pay. This is usually given as a range.[/FONT]

https://www.ricsfirms.com/glossary/extending-residential-leases/
https://www.alep.org.uk/find-a-practitioner

[FONT=Verdana, sans-serif]If you are happy with the likely figures you would appoint a solicitor to prepare the Section 42 notice as it’s important the notice complies and is served on the right person at the right address. The 1[/FONT][FONT=Verdana, sans-serif]st[/FONT][FONT=Verdana, sans-serif] thing a competent freeholder will do is check the validity of any notice to see if it can be rejected.[/FONT]

[FONT=Verdana, sans-serif]It’s important to check that both surveyor and solicitor specialise in this area of practice.[/FONT]

[FONT=Verdana, sans-serif]The other thing to do now is check the lease as doubling ground rents are sometimes only for the 1[/FONT][FONT=Verdana, sans-serif]st[/FONT][FONT=Verdana, sans-serif] so many years.[/FONT]

[FONT=Verdana, sans-serif]Once you serve notice you are liable for both sides costs even if you later pull out and do not go ahead.[/FONT]

AdrianC

jumperabv3 wrote: »

Yes, but if I can buy out the ground rent why not do it? It would add a significantly high value when I sell the property because the potential buyer would know he has £0.00 Ground Rent to pay per year, that makes it much better than other flats that leaseholders would continue paying it every year.

(I'm thinking about the long term).

Ah, now there's two different questions...

The first is about owning a share of the freehold, and granting a new lease with peppercorn ground rent - or using the statutory route to extend the lease.

The second is about a 20-year doubling clause.

You were clearly happy with the non-trivial amount of ground rent when you purchased the flat, and it's something that's hardly unusual for leasehold flats. Your original post asks the question in terms of the 20yr doubling, in the light of the market dislike for 10yr-double clauses (but acceptance of 25yr).

jumperabv3

AdrianC wrote: »

Ah, now there's two different questions...

The first is about owning a share of the freehold, and granting a new lease with peppercorn ground rent - or using the statutory route to extend the lease.

The second is about a 20-year doubling clause.

You were clearly happy with the non-trivial amount of ground rent when you purchased the flat, and it's something that's hardly unusual for leasehold flats. Your original post asks the question in terms of the 20yr doubling, in the light of the market dislike for 10yr-double clauses (but acceptance of 25yr).

I am not too sure I understand you very well.
Yes, I signed the purchase/lease agreement, yes, I am responsible for my decisions, and yes - if I can according to the law, pay in advance a lump sum to get rid of that clause - then why not do it if in my opinion it's a good "investment"?

I am not too sure I understand what's wrong with my approach here?

jumperabv3

Tom99 wrote: »

[FONT=Verdana, sans-serif]Once you serve notice you are liable for both sides costs even if you later pull out and do not go ahead.[/FONT]

Thank you Tom for all the information, much appreciated.

If I decide to go ahead, I understand I would be liable to pay for both sides, that's fine, but can I ask is there a case where the company refuses to reduce the ground rent to 0 or refuses to proceed and then I won't be able to move on with this? I mean, hypothetically speaking, can they do that?

Tom99

jumperabv3 wrote: »

Thank you Tom for all the information, much appreciated.

If I decide to go ahead, I understand I would be liable to pay for both sides, that's fine, but can I ask is there a case where the company refuses to reduce the ground rent to 0 or refuses to proceed and then I won't be able to move on with this? I mean, hypothetically speaking, can they do that?

No, you have a statutory right to extend the lease by 90yrs and reduce the ground rent to a peppercorn, the only thing the freeholder can dispute is the price you will pay.

kazzamunga

jumperabv3 wrote: »

Thanks for the link, it says:

"You qualify if you own a house or flat with a 10 year doubling ground rent clause and you bought your property directly from Taylor Wimpey."

So I cannot use them as I didn't buy the property from TW, correct?

Yes but I'm saying is a deed of variation not an option, whether or not you qualify for this particular scheme (which you don't)?

bouicca21

Surely the essential question here is whether the investment in a lease extension is worth it in terms of saleability and increased capital value. I have a similar doubling ground rent, though mine is capped after 60 years.

Since I already have a long lease I doubt that an extension would add value. I worked out the cost and it would take something like 30 years to break even. Not worth it!