Am I in trouble re Ground Rent?

saskay

A few years ago I staircased to 100% on a shared ownership flat (25% initial share). After staircasing to 100%, I received an email from housing association rep saying now that I own 100% I no longer have to pay rent but there will be a ground rent of £750/year (RPI-based review every five years) which will be added to charge (I assumed they mean they will add to my direct debit for service charge I pay each month).  So I was under the impression all this while that I've been paying ground rent.

But recently I was told ground rent is not actually been included in my monthly direct debits when I asked for the breakdown of my direct debit - am I now in ground rent arrears? I heard that freeholder must send a notice for ground rent in a particular format - I do not remember ever receiving one. So basically I haven't paid ground rent for the last 2 years.

eddddy

saskay said:

I heard that freeholder must send a notice for ground rent in a particular format - I do not remember ever receiving one. So basically I haven't paid ground rent for the last 2 years.

Ground rent is only due when a bill is sent. If no bill has been sent, it's not due. But the freeholder has up to 6 years to send you a bill.

But you're right to be wary, if your flat is outside London with £750 pa ground rent, the risk of forfeiture (repossession) is higher, if you don't pay ground rent that is due.

But as your freeholder is a housing association, I doubt they would go straight for forfeiture - and leave you homeless. That would probably be against their principles and ethos.


As an aside, a £750 pa ground rent with 5 yearly RPI increases might be unacceptable to a lot of future mortgage lenders.

saskay

eddddy said:

saskay said:

I heard that freeholder must send a notice for ground rent in a particular format - I do not remember ever receiving one. So basically I haven't paid ground rent for the last 2 years.

Ground rent is only due when a bill is sent. If no bill has been sent, it's not due. But the freeholder has up to 6 years to send you a bill.

But you're right to be wary, if your flat is outside London with £750 pa ground rent, the risk of forfeiture (repossession) is higher, if you don't pay ground rent that is due.

But as your freeholder is a housing association, I doubt they would go straight for forfeiture - and leave you homeless. That would probably be against their principles and ethos.


As an aside, a £750 pa ground rent with 5 yearly RPI increases might be unacceptable to a lot of future mortgage lenders.

The flat is inside London, and that's why I'm currently in the (formal) lease extension process so the ground rent goes to zero. Currently there is 120 years left on the lease.

eddddy

saskay said:

eddddy said:

saskay said:

I heard that freeholder must send a notice for ground rent in a particular format - I do not remember ever receiving one. So basically I haven't paid ground rent for the last 2 years.

Ground rent is only due when a bill is sent. If no bill has been sent, it's not due. But the freeholder has up to 6 years to send you a bill.

But you're right to be wary, if your flat is outside London with £750 pa ground rent, the risk of forfeiture (repossession) is higher, if you don't pay ground rent that is due.

But as your freeholder is a housing association, I doubt they would go straight for forfeiture - and leave you homeless. That would probably be against their principles and ethos.


As an aside, a £750 pa ground rent with 5 yearly RPI increases might be unacceptable to a lot of future mortgage lenders.

The flat is inside London, and that's why I'm currently in the (formal) lease extension process so the ground rent goes to zero. Currently there is 120 years left on the lease.

So it sounds like you've got everything under control.

I guess the only potential risk is if the freeholder says they've sent you ground rent bills - but you say you haven't received them. 

But as I say, I very much doubt that a Housing Association would start proceedings for forfeiture.