Lease Advice

carbon8

Hi

I recently received a letter relating to my leasehold property asking for a backdated ground rent increase. The rent review date was 1 Jan 2024, and is due for review every 5 years. Since the letter makes reference to the terms in the lease, I read it, and there is a clause in the Fifth Schedule (provisions for the review of rent) and it says:

"The Landlord shall on or before each Review Date give notice to the Tenant of the amount of the Rent payable as from the relevant Review Date"

It seems to me that would mean they are late in informing me of the increase? They say they need time to prepare the new rate as the RPI figures are not released in time, but that is hardly my problem is it? Am I missing something here?

Cheers!

C8

propertyrental

what does the lease say about the rent review calculation?

user1977

Usually such clauses would use the published figures from (say) two months prior to the relevant dates. So what does it actually say?

eddddy

I think the OP's question is more along the lines of...

• The lease says I must be told the new increased ground rent on or before the "Review Date"

• I wasn't told the new increased ground rent on or before the "Review Date" (and I don't really care why)

• Therefore, am I contractually required to pay the new increased ground rent?

Maybe there are other clauses in the lease that clarify that. Maybe looking at the definition of "Review Date" will help.




As far as I'm aware, there is no route for challenging ground rents (in the same way as you can challenge service charges).

So maybe it would be a case if not paying the increase, and waiting for the freeholder to charge you late fees for non-payment. And then you can challenge the late fees at tribunal.

And I assume that, in order to decide whether late fees are payable, the tribunal would have to decide whether the ground rent increase is payable.

carbon8

Hi

Yes edddy that is pretty much my thought process! Just never having much experience with these things I did wonder how it would go, would it be up to me to demand a Tribunal? From what i can gather if I don't pay the full rent for 3 years the can revoke the lease which is not good.

The Review Date is defined as: the fifth anniversary pf the commencement of the Term and each fifth anniversary thereafter.

As far as the calculation goes, it is the initial rent amount back when the lease was first prepared £125 * (RPI Now / RPI Then) and the figures used are from the month immediately before the review (Dec 23). So yes of course they could never do that calculation in time realistically but as I say its not really my problem if they have created (or purchased) a freehold with a dodgy lease

Since it is probably a boilerplate lease, I do wonder if my whole development is the same too, maybe all houses from this developer.

Cheers!

C8

eddddy

carbon8 said:

From what i can gather if I don't pay the full rent for 3 years the can revoke the lease which is not good.

In that case, the freeholder would be applying to a court to forfeit (revoke) your lease for non-payment of ground rent.

So I guess your reply to the court would be "I have paid the ground rent according to what my lease says".

If the court agrees with you, they would refuse the freeholder's application.


BUT... the big problem with this (and my previous suggestion that you challenge late fees), is if the court disagrees with you and you lose - you'll probably have a lot of extra fees and costs to pay.



So on second thoughts, maybe a better approach would be

• Pay the full ground rent demanded

• Then ask for repayment of the part that you are disputing

• If they refuse to pay you, send a 'Letter before action'

• Then make a court claim for the disputed amount

Then the court will read the lease, and decide whether you are due a repayment.

(And this way, if you lose, you shouldn't have extra fees or costs to pay.)

carbon8

Brilliant, yes that is the safest way to do it! Thanks eddddy