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Escalating ground rent nightmare
ekj
Posts: 1 Newbie
Hi
I'm looking for some help. My partner is trying to sell a flat he bought 4 years ago. It was newly built when purchased. He has been advised when putting the property on the market by estate agents that virtually all mortgage lenders will not lend money due to the ground rent increasing. Which will make it difficult to sell! We have instructed a solicitor to complete a deed of variation in March and have yet to have any response from the freeholder. When we have approached the freeholder they have told us that they are under no obligation to complete a deed of variation. It does feel like we are trapped with the property now. He was never clearly told this would be an issue when first purchasing the property. I'd be grateful if anyone can suggest a way of taking this further. It feels very unfair they are preventing us from moving home by refusing to allow a deed of variation on the lease. Other properties in the building have had this agreed previously.
I'm looking for some help. My partner is trying to sell a flat he bought 4 years ago. It was newly built when purchased. He has been advised when putting the property on the market by estate agents that virtually all mortgage lenders will not lend money due to the ground rent increasing. Which will make it difficult to sell! We have instructed a solicitor to complete a deed of variation in March and have yet to have any response from the freeholder. When we have approached the freeholder they have told us that they are under no obligation to complete a deed of variation. It does feel like we are trapped with the property now. He was never clearly told this would be an issue when first purchasing the property. I'd be grateful if anyone can suggest a way of taking this further. It feels very unfair they are preventing us from moving home by refusing to allow a deed of variation on the lease. Other properties in the building have had this agreed previously.
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Comments
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Advertise the property for cash buyers only?0
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Join the National Leasehold Campaign Facebook group where you will get advice/support. Many others are/have been in the same situation. You may well find others there with the same freeholder and will share how they are dealing with it.
https://m.facebook.com/groups/nationalleaseholdcampaign/?ref=group_header&view=group
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You might have to auction it.It’s almost criminal your conveyancers weren’t on the ball when he bought it, I assume developers recommended them?0
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What are the terms of the ground rent escalation? A 25 year doubling clause is acceptable to most banks (specifics here https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1852/) for example, however if the ground rent goes above £251 it would become an assured shorthold tenancy (assuming outside London) and thus require the seller to likely purchase an indemnity policy.0
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He will need to either negotiate a fee to persuade the Freeholder to sign the variation or do a statutory lease extension which will delete the ground rent. Either way it will be expensive.
Or auction/ cash buyer as others have said.0 -
What is the increase schedule?ekj said:He has been advised when putting the property on the market by estate agents that virtually all mortgage lenders will not lend money due to the ground rent increasing.When we have approached the freeholder they have told us that they are under no obligation to complete a deed of variation.
That's true, they aren't. The lease that he agreed to on purchase is legally binding on both sides.
Let me guess... He used the developer's "recommended" solicitor when purchasing?
When did he purchase?
This has been in the news since 2016...
https://www.theguardian.com/money/2016/nov/05/ground-rent-scandal-engulfing-new-home-buyers-leasehold
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It depends on the terms of the lease as to whether lenders will lend on the property or not.0
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