Ground rent 5yr RPI review - dispute on % calculated

ZoltarSpeaks

saajan_12 said:

ZoltarSpeaks said:

I've just dug out the lease. It says the Index = the index of retail prices published by government. It also says: 'The rent for any review period is to be the initial rent (£250) plus the amount which bears the same proportion to the initial rent as the increase bears to the base figure rounded up to the nearest £10.' (which clearly, if I'm understanding it correctly, they haven't complied with the last part - since they state the new ground rent is £344.75)

The 'Base figure is the index figure for the month preceding the commencement of the new term.' Trying to get my head around this sentence and if it impacts the calculation...

Please quote any clauses in full which mention how its calculated, as the above isn't sufficient to outline a calculation. It'll often mention a formula, observation dates, etc. 

Hi Saajan

Hmmm that's interesting because there isn't really anything like that in my lease. See attached photos. There's no other part of the lease amendment that refers to the rent review (other than the page over that talks of dispute resolution).

Lease amendment to add more years was signed on March 2018. The ground rent period runs from July to June each year. I've tried calculating the RPI starting from every month between March and July 2018 and none come to their figure. 

They've clearly not referred to my lease to come to their figure because it says the figure should be rounded up to the nearest £10. 

Their letter re. the rent review says the calculations are as: 

"July 2018 to June 2023 increase is 37.9% so to calculate ground rent increase multiply 2018 rent by 1.379 
eg 250 x 1.379 = £344.75 (2023 new rent)"

Thanks
 

ZoltarSpeaks

eddddy said:

tetrarch said:

Hev you thought about checking with you nearby fellow leaseholders. There is power in numbers

ZoltarSpeaks said:

That's a really good idea. I suspect we all have different leases - the previous owner did a quick £500 renewal to add more years on, which put me onto RPI ground rent increases. But definitely worth finding out. 

Be very careful - I'm not sure there really is power in numbers. 

In particular, withholding your full ground rent could be very dangerous.

Your ground rent is over £250. If your property is outside London and you don't pay it for 3 months, your freeholder might have the mandatory right to repossess your flat - a court might not be able to refuse.


Even if you're within London and/or you (and other leaseholders) only withhold part of your ground rent, your freeholder is likely to:

• Send you reminder letters - and charge you a fee of £40+ per letter sent
• Instruct solicitors - and charge their fees to you, which could be a few hundred pounds
• Instruct debt collectors (with more fees) and/or start possession proceedings

TBH, there are laws you can use to dispute a service charge, but I can't see any law relating to disputing ground rent.

Maybe phone LEASE to see what they say: https://clients.lease-advice.org/#/


For the moment, in your position, I would..

• Pay the ground rent they are asking for before the due date (to avoid any fees)
• Tell them in writing that you dispute the amount, and you are paying under protest
• Ask in writing for details of the calculation that their valuer used

Thanks Eddddy. 

I have a call pending with LEASE on Thursday. And I agree with your assessment of what I should do atm. Thanks for your advice. It's much appreciated

user1977

What's the definition of "New Term"?

anselld

It will be July to July or June to June, not July to June.

ZoltarSpeaks

user1977 said:

What's the definition of "New Term"?

'a term of 150 years beginning on and including 1 May 1995'. But the surrender and new lease amendment was signed on 9 March 2018.