Buyer asking me to purchase indemnity insurance to protect against backdated demand for rent

littlemiss19

Hi everyone,
Hope you enjoyed the Christmas break.

The buyer of our flat is asking us to purchase indemnity insurance to protect them against a backdated demand for rent. I am confused by this request as I have checked the lease (which has 982 years remaining) and the rent is peppercorn. Would it be possible the freeholders could ask for rent and if so, how much would that be for?
Our solicitor is saying the insurance is £141. 

While I realise this is a small price to pay instead of losing the buyer, I don't really want to be purchasing unnecessary items, especially when they've insisted on an electrical survey to be completed and we are waiting to hear the outcome of this. 

Thanks,
Littlemiss

Titus_Wadd

Is the backdated ground rent limited to 6 years?  It's only a few years but someone will confirm.  Work out the total (assuming it's 6 years) 6 x £peppercorn = N.

If N is less than £141 leave your solicitor holding that amount (N) in case they are presented with a bill.

greatcrested

Does the lease say 'peppercorn'? What is the exact wording? If so, go to Sainsburys and buy this, then say you will include it as part of Completion.

But if there is an actual cash amount due, how many years potentially might be unpaid and does the total exceed £141?

I assume they are paying for the electrical survey, not you?!! If so, this is normal, and unrelated to your rent query.

davidmcn

What's your solicitor's advice? As above, it would be very silly to take out insurance against a backdated demand for a token rent.

AdrianC

greatcrested said:

Does the lease say 'peppercorn'? What is the exact wording? If so, go to Sainsburys and buy this, then say you will include it as part of Completion.

Profligate wastrel!
https://www.sainsburys.co.uk/gol-ui/product/sainsburys-black-peppercorns-45g

lisyloo

Titus_Wadd said:

Is the backdated ground rent limited to 6 years?  It's only a few years but someone will confirm.  Work out the total (assuming it's 6 years) 6 x £peppercorn = N.

If N is less than £141 leave your solicitor holding that amount (N) in case they are presented with a bill.

If you mean the statue of limitations then it’s 12 years for land and property. However this does not mean the money isn’t owed simply that it’s unenforceable.

littlemiss19

The lease states ' basic rent is one peppercorn'.  

I am unable to locate information regarding the backdated rent amount or time frame. I will ask my solicitor to explain this more as its a little unclear. 

As for the electrical survey, yes, they are paying for it, but I guess I am feeling a little nervous as its an old property.

AdrianC

littlemiss19 said:

The lease states ' basic rent is one peppercorn'.  

So there y'go. Literally, just one of these per year.


That Sainsbury's link will do you for centuries for a quid.

greatcrested

Yup! Either

* pay Sainsburys £1.00, take out 12 corns to cover any potential rent claim, and give them to the buyer (the rest of the peppercorns will go well in a stew), or

* pay £141 for the insurance.

Now.... which is better value....?

lisyloo

littlemiss19 said:

The lease states ' basic rent is one peppercorn'.  

I am unable to locate information regarding the backdated rent amount or time frame. I will ask my solicitor to explain this more as its a little unclear. 

As for the electrical survey, yes, they are paying for it, but I guess I am feeling a little nervous as its an old property.

That’s understandable.
what sometimes happens if say a place needs complete re-wiring, then buyers and sellers agree 50/50.
given that you could have the same issue with future sellers then most people compromise on these things.
i know it’s frustrating but it doesn’t sound to me like they are being unreasonable. Simply covering off the risks as many buyers would. 
Expecting the place to be perfect given it’s an old property or for you to pay 100% for general wear & tear commensurate with the age of the property would be unreasonable.

NameUnavailable

Threads like this really make me wonder what the solicitors are doing!