Who is responsible for owed ground rent?

jammydodga

We bought a house in 2022, it was a leasehold property that the sellers were in the process of buying the freehold.  Just before completion we had confirmation that the freehold purchase had gone through.  Fast forward to last week, I opened a letter that’s from the property management company for our estate (opened in error, not addressed to us) stating they are owed money in ground rent.  As we bought the property as a freehold, can they make us pay? There was never any mention of ground rent payments from any party when we purchased.  I’ve emailed the conveyancing company we used, but have yet to receive a reply, and I’m reluctant to contact the company in case they want to try make us pay! 

has anyone been in this situation? What did you do?

theoretica

Are they saying there were ground rent arrears when they sold the freehold, or that they still want fees - perhaps still being able to claim management fees, but through a clerical error have asked for the wrong thing?

jammydodga

theoretica said:

Are they saying there were ground rent arrears when they sold the freehold, or that they still want fees - perhaps still being able to claim management fees, but through a clerical error have asked for the wrong thing?

Ground rent fees.  However, the letter wasn’t addressed to me (opened in error) and according to a local residents group, nobody on the estate has had commas from them since 2018.  I don’t want to call and get caught in an argument.  The leasehold was sold to the previous owner of the property, not to us, so I don’t have any of that information. 

propertyrental

Go through the LR Title, and documentation your received from your solicitor and see what mention there is if any of ground rent.

jammydodga

propertyrental said:

Go through the LR Title, and documentation your received from your solicitor and see what mention there is if any of ground rent.

Thank you.  I will dig the information out.  Would we be liable for debt not paid by the original owner?

NameUnavailable

The debt is on the property so as you own it now you are potentially liable.

However, I would be surprised if they didn't demand ground rent arrears as part of the freehold sale. Also, if selling a leasehold, the solicitors would usually hold a retention against potential charges (usually service charges which aren't always defined until after the accounting year end).

I think you need to check exactly what the charges are for - are you sure it's not an estate charge? If you are certain it's ground rent I'd be inclined to ignore for now (or RTS the letter).

jammydodga

NameUnavailable said:

The debt is on the property so as you own it now you are potentially liable.

However, I would be surprised if they didn't demand ground rent arrears as part of the freehold sale. Also, if selling a leasehold, the solicitors would usually hold a retention against potential charges (usually service charges which aren't always defined until after the accounting year end).

I think you need to check exactly what the charges are for - are you sure it's not an estate charge? If you are certain it's ground rent I'd be inclined to ignore for now (or RTS the letter).

It’s definitely ground rent.  I’ve just looked on land registry and the property is freehold.  Our registration still hasn’t gone through with LR yet, but the seller we bought from is on the deed online and it’s listed as freehold.  I will ring the estate agent we bought through and ask if they can get the documents from the freehold sale.  The demand came in the original owners name, but surely they’d know the lease was bought out? 

NameUnavailable

jammydodga said:

NameUnavailable said:

The debt is on the property so as you own it now you are potentially liable.

However, I would be surprised if they didn't demand ground rent arrears as part of the freehold sale. Also, if selling a leasehold, the solicitors would usually hold a retention against potential charges (usually service charges which aren't always defined until after the accounting year end).

I think you need to check exactly what the charges are for - are you sure it's not an estate charge? If you are certain it's ground rent I'd be inclined to ignore for now (or RTS the letter).

It’s definitely ground rent.  I’ve just looked on land registry and the property is freehold.  Our registration still hasn’t gone through with LR yet, but the seller we bought from is on the deed online and it’s listed as freehold.  I will ring the estate agent we bought through and ask if they can get the documents from the freehold sale.  The demand came in the original owners name, but surely they’d know the lease was bought out? 

You need to speak to your solicitors/conveyancers not the EA. It can take some time for the LR to update.

silvercar

jammydodga said:

NameUnavailable said:

The debt is on the property so as you own it now you are potentially liable.

However, I would be surprised if they didn't demand ground rent arrears as part of the freehold sale. Also, if selling a leasehold, the solicitors would usually hold a retention against potential charges (usually service charges which aren't always defined until after the accounting year end).

I think you need to check exactly what the charges are for - are you sure it's not an estate charge? If you are certain it's ground rent I'd be inclined to ignore for now (or RTS the letter).

It’s definitely ground rent.  I’ve just looked on land registry and the property is freehold.  Our registration still hasn’t gone through with LR yet, but the seller we bought from is on the deed online and it’s listed as freehold.  I will ring the estate agent we bought through and ask if they can get the documents from the freehold sale.  The demand came in the original owners name, but surely they’d know the lease was bought out? 

With a leasehold property the freeholder would only know a change of ownership if this had been registered with the freeholder when you purchased, it is part of your solicitor’s work to make sure this happens. As your property is freehold, there would be no need to tell the previous seller of the free holder that the property had been sold on. Your seller bought the freehold of this company and then sold it on to you. You wouldn’t inform the previous-but-one owner of a property that you had sold it on. If A is the original free holder who sold the freehold to B who owned the leasehold and bought the freehold from A, then as owner of the freehold, B has no need to tell A that he has sold the property on to C (you). When I sell my house, I’m not going to tell the person I bought from the name of the next owner.

jammydodga

silvercar said:

jammydodga said:

NameUnavailable said:

The debt is on the property so as you own it now you are potentially liable.

However, I would be surprised if they didn't demand ground rent arrears as part of the freehold sale. Also, if selling a leasehold, the solicitors would usually hold a retention against potential charges (usually service charges which aren't always defined until after the accounting year end).

I think you need to check exactly what the charges are for - are you sure it's not an estate charge? If you are certain it's ground rent I'd be inclined to ignore for now (or RTS the letter).

It’s definitely ground rent.  I’ve just looked on land registry and the property is freehold.  Our registration still hasn’t gone through with LR yet, but the seller we bought from is on the deed online and it’s listed as freehold.  I will ring the estate agent we bought through and ask if they can get the documents from the freehold sale.  The demand came in the original owners name, but surely they’d know the lease was bought out? 

With a leasehold property the freeholder would only know a change of ownership if this had been registered with the freeholder when you purchased, it is part of your solicitor’s work to make sure this happens. As your property is freehold, there would be no need to tell the previous seller of the free holder that the property had been sold on. Your seller bought the freehold of this company and then sold it on to you. You wouldn’t inform the previous-but-one owner of a property that you had sold it on. If A is the original free holder who sold the freehold to B who owned the leasehold and bought the freehold from A, then as owner of the freehold, B has no need to tell A that he has sold the property on to C (you). When I sell my house, I’m not going to tell the person I bought from the name of the next owner.

Surely though, owner b bought a leasehold property from owner a, and bought the freehold from the company.  I’m owner c, who purchased a freehold property. The leasehold owner should know this, surely? If someone has bought the freehold from them? 

eddddy

jammydodga said:

We bought a house in 2022, it was a leasehold property that the sellers were in the process of buying the freehold.  Just before completion we had confirmation that the freehold purchase had gone through.  Fast forward to last week, I opened a letter that’s from the property management company for our estate (opened in error, not addressed to us) stating they are owed money in ground rent.  As we bought the property as a freehold, can they make us pay? There was never any mention of ground rent payments from any party when we purchased.  I’ve emailed the conveyancing company we used, but have yet to receive a reply, and I’m reluctant to contact the company in case they want to try make us pay! 

Has the ground rent bill just been issued, or is it a 'reminder' for a bill that was issued before you owned the freehold?


If it's a newly issued bill, I'm not sure that it's valid. Because when you became freeholder / landlord you took over the right to issue new ground rent bills (including bills for historic ground rent).

(So as freeholder, you can issue a bill to yourself as leaseholder!)


But if the letter is a reminder for a bill was first issued before you became freeholder, then it's a legitimate bill that is payable by the previous leaseholder.