Ground Rent doubling itself every 20 years

jumperabv3

Tom99 wrote: »

[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]

Tom,

My letting agent told me it's best to contact the Fholder first, then they would tell me to pay fees, and then they would make an offer. Is that the right way to do it?

Or should I do it the way you told me - which is contact a surveyor first, get a valuation, then get a solicitor involved to ensure this will be enforced if necessary via tribunal decision etc.?

Also I've emailed the FHolder just to inquire what they offer - perhaps I should just wait to hear back from them before contacting a surveyor, just to be better safe than sorry?

Tnx.

Tom99

jumperabv3 wrote: »

Tom,

My letting agent told me it's best to contact the Fholder first, then they would tell me to pay fees, and then they would make an offer. Is that the right way to do it?

Or should I do it the way you told me - which is contact a surveyor first, get a valuation, then get a solicitor involved to ensure this will be enforced if necessary via tribunal decision etc.?

Also I've emailed the FHolder just to inquire what they offer - perhaps I should just wait to hear back from them before contacting a surveyor, just to be better safe than sorry?

Tnx.

There is no harm in waiting for a reply to see what they to say. If they want a fee before making you an offer you can then decide what action to take.
Remember that if you negotiate with the freeholder outside the statutory process there is no way to force their hand if you think they are being unreasonable.

jumperabv3

The freeholder has responded to my inquiry today via email as follows:

Thank you for your enquiry on the online portal.

We offer informal negotiations without serving notice. If you wish to find more information on the statutory route you should enquire with a solicitor.  

As the statutory process is a legal transaction, we advise to seek professional legal advice. Useful guidance can also be obtained from independent sources such as The Leasehold Advisory Service: http://www.lease-advice.org

Does it mean I shall take Tom99's advice? They said to speak to a solicitor, but Tom said speak to a surveyor first - so what do you suggest?

jumperabv3

jumperabv3 said:

The freeholder has responded to my inquiry today via email as follows:

Thank you for your enquiry on the online portal.

We offer informal negotiations without serving notice. If you wish to find more information on the statutory route you should enquire with a solicitor.  

As the statutory process is a legal transaction, we advise to seek professional legal advice. Useful guidance can also be obtained from independent sources such as The Leasehold Advisory Service: http://www.lease-advice.org

Does it mean I shall take Tom99's advice? They said to speak to a solicitor, but Tom said speak to a surveyor first - so what do you suggest?

Would appreciate your advice.

Tom99

The freeholder is saying if you wish to follow the statutory route find out more about it from a solicitor or lease-advice.org.

Whilst they have said they are open to negotiations outside the statutory process they do not say if they would require you to pay a non refundable valuation fee before they are willing to start negotiations.

You can mug up on the statutory process by reading the info on lease-advice.org and the other such websites.

At this stage you are in need on valuation rather than legal advice. A solicitor will prepare a valid statutory notice for you if you decide to follow that route but they will not tell you what premium figure to include.

That is why I suggested a surveyor 1st. They should have experience of the latest acceptable way of valuing ground rents with reviews such as yours.

You could of course do without surveyor/solicitor at this stage and ask the freeholder if they would quote a premium for a lower ground rent or no ground rent at all. That might get you an answer to whether they want an upfront fee. For example keep the current £400pa ground rent fixed throughout the term.

jumperabv3

Tom99 said:

The freeholder is saying if you wish to follow the statutory route find out more about it from a solicitor or lease-advice.org.

Whilst they have said they are open to negotiations outside the statutory process they do not say if they would require you to pay a non refundable valuation fee before they are willing to start negotiations.

You can mug up on the statutory process by reading the info on lease-advice.org and the other such websites.

At this stage you are in need on valuation rather than legal advice. A solicitor will prepare a valid statutory notice for you if you decide to follow that route but they will not tell you what premium figure to include.

That is why I suggested a surveyor 1st. They should have experience of the latest acceptable way of valuing ground rents with reviews such as yours.

You could of course do without surveyor/solicitor at this stage and ask the freeholder if they would quote a premium for a lower ground rent or no ground rent at all. That might get you an answer to whether they want an upfront fee. For example keep the current £400pa ground rent fixed throughout the term.

Thanks Tom,
Okay, I've emailed them back asking for their price for various options (e.g. keep the ground rent the same, lower it permanently or zeroing it permanently) ... waiting for their response now.

ThePants999

FWIW, doubling every 20 years is the same as a 3.53% annual increase (though better, as you defer all the increases to the 20th year).