Freeholder 'forgot' to charge ground rent

Rico456

Hello,

I am in a spot of bother. I am remortgaging my flat, and the solicitor wants to see evidence of ground rent.
I have never been charged this, and the solicitor is saying they cannot complete unless there is evidence of ground rent.

I have asked the developer/ freeholder to confirm I have never been charged this, and they are unwilling to confirm this. I suspect they have forgotten to charge me over the last 4 years, as I have never received any sort of invoice. They were not willing to put anything in writing.

I was aware at the start there was ground rent, but no one is the block of flat has been charged this.

4 years on, am I liable for this? can the developer now starting charging me (and only me?)

The developer have said to the solicitor 'if your client is saying they have not paid, we can raise an invoice for the unpaid years'.

Is there any way around this- do I just have to accept they forgot to charge me and I have to stump up the £600 total? While it may or may not be alot to some, I think the principle of not actually charging me should not hold things up?

What are my options?

thanks,
B

Exodi

Rico456 said:

4 years on, am I liable for this? can the developer now starting charging me (and only me?)

Why would you not be - you don't seem to dispute that ground rent is payable? The crux of your argument seems to be as they've yet to charge you, you don't owe it? I'm sure you wouldn't appreciate this situation if it was the other way round.

They can seek backdated payment within the limitations period (6 years), so yes, all due. Separately, as you want to sell the flat and the freeholder & solicitor have made their positions clear, I'm not sure "it's the principal" arguments will achieve anything.

https://www.lease-advice.org/faq/my-landlord-has-not-demanded-ground-rent-for-several-years-can-he-still-demand-it/

Do you know for certain that everyone is not paying ground rent? Even if this is the case, you can't know for certain the freeholder will only charge you now it's been brought to their attention - they could go after all leaseholders, though it doesn't change anything.

You could contact the Leasehold Advisory Service to get a second opinion:

https://clients.lease-advice.org/#/

eddddy

I think there's either been a misunderstanding, or your solicitor is mistaken.

In simple terms, Section 166 of the Commonhold and Leasehold Reform Act 2002 says that Ground Rent is only payable if it has been demanded. i.e. Ground Rent isn't payable unless you get a bill for it (in the prescribed format)

Here's the legislation:

166 Requirement to notify long leaseholders that rent is due

(1) A tenant under a long lease of a dwelling is not liable to make a payment of rent under the lease unless the landlord has given him a notice relating to the payment; and the date on which he is liable to make the payment is that specified in the notice.

Link: https://www.legislation.gov.uk/ukpga/2002/15/section/166

So I would have answered the solicitor with something like:

"No ground rent has been demanded, so no ground rent has been payable. Therefore, there is no overdue ground rent. Should any Ground Rent be correctly demanded in the future, I will of course pay it. "



More generally, a Freeholder can demand Ground Rent for up to 6 years back.

So now you've 'rattled the Freeholder's cage', I guess they might decide it's worth demanding up to 6 years of ground rent from you and/or other leaseholders in your block.

Rico456

@Exodi Hello, yes I know the other tenants and we all pay the service charge but none have ever had a request to pay ground rent aside from the first year we moved in.
How can it be due if it is not requested? it would be due if it was requested. I haven't with held any payment, as I have never been demanded it.

@eddddy thank you, I will try that approach.

EssexHebridean

You should certainly be ensuring that the money for the relevant amount of GR is set aside ready for a demand to be received too.

Exodi

Rico456 said:

@Exodi Hello, yes I know the other tenants and we all pay the service charge but none have ever had a request to pay ground rent aside from the first year we moved in.
How can it be due if it is not requested? it would be due if it was requested. I haven't with held any payment, as I have never been demanded it.

@eddddy thank you, I will try that approach.

I feel like you've slyly changed the question now based on eddddy's response, as it started as "4 years on, am I liable for [ground rent]? can the developer now starting charging me" to now "How can it be due if it is not requested? it would be due if it was requested". You could have answered your own question if you already knew you were liable to pay it if it was requested. It's also obvious why you might personally prefer eddddy's reply to mine as it paints a glimmer of hope that you can escape this situation without paying ground rent.

Personally, I think it is a bit of a naive approach to take considering the circumstances, but nonetheless, I hope you get it sorted and hope that you update the thread with the result to help others in the same situation.

Rico456

Exodi said:

Rico456 said:

@Exodi Hello, yes I know the other tenants and we all pay the service charge but none have ever had a request to pay ground rent aside from the first year we moved in.
How can it be due if it is not requested? it would be due if it was requested. I haven't with held any payment, as I have never been demanded it.

@eddddy thank you, I will try that approach.

I feel like you've slyly changed the question now based on eddddy's response, as it started as "4 years on, am I liable for [ground rent]? can the developer now starting charging me" to now "How can it be due if it is not requested? it would be due if it was requested". You could have answered your own question if you already knew you were liable to pay it if it was requested. It's also obvious why you might personally prefer eddddy's reply to mine as it paints a glimmer of hope that you can escape this situation without paying ground rent.

Personally, I think it is a bit of a naive approach to take considering the circumstances, but nonetheless, I hope you get it sorted and ask that you update the thread with the result to help others in the same situation.

I think it follows a logical and reasonable position to ask how can it be due if it is not requested? It would also seem logical (to me anyway), that if you were not charged for something, you are not liable for it. 

One would think a major organisation would have there affairs in order to charge something annually. I think that's a reasonable position and I wondered if anyone else thought the same, or really, I am at the will large organisations imposing things whenever they want, in particular, back date fees for something that is not my fault.

I am aware the legal answer and the moral answer don't always align, and had hoped the most logical and sensible thing was to not be retrospectively charged things.

Would there be anyway to find out for sure if no one else paid the ground rent, eg through a FOI request? Wondered if I would have some kind of case for making me pay when others did not?

eddddy

Rico456 said:

Would there be anyway to find out for sure if no one else paid the ground rent, eg through a FOI request? Wondered if I would have some kind of case for making me pay when others did not?

Other people's payments, debts etc is confidential information.

In the same way as a bank wouldn't tell you how much your neighbours have been billed and/or paid on their credit card, a Management Company won't tell you how much your neighbours have been billed and/or paid for Ground Rent.

Out of interest... Why do you care if others have paid their ground rent?


A more interesting/important question to ask your neighbours might be "Have you been receiving Ground Rent Bills?" Because if they have, but you haven't, there's a possibility that your bills are going astray - and you have Ground Rent arrears.



Edit to add...

Just to double check - have you been receiving Service Charge bills?

(And have you checked, do the Service Charge bills include a line item for 'Ground Rent'?)

Exodi

Rico456 said:

Exodi said:

Rico456 said:

@Exodi Hello, yes I know the other tenants and we all pay the service charge but none have ever had a request to pay ground rent aside from the first year we moved in.
How can it be due if it is not requested? it would be due if it was requested. I haven't with held any payment, as I have never been demanded it.

@eddddy thank you, I will try that approach.

I feel like you've slyly changed the question now based on eddddy's response, as it started as "4 years on, am I liable for [ground rent]? can the developer now starting charging me" to now "How can it be due if it is not requested? it would be due if it was requested". You could have answered your own question if you already knew you were liable to pay it if it was requested. It's also obvious why you might personally prefer eddddy's reply to mine as it paints a glimmer of hope that you can escape this situation without paying ground rent.

Personally, I think it is a bit of a naive approach to take considering the circumstances, but nonetheless, I hope you get it sorted and ask that you update the thread with the result to help others in the same situation.

I think it follows a logical and reasonable position to ask how can it be due if it is not requested? It would also seem logical (to me anyway), that if you were not charged for something, you are not liable for it. 

One would think a major organisation would have there affairs in order to charge something annually. I think that's a reasonable position and I wondered if anyone else thought the same, or really, I am at the will large organisations imposing things whenever they want, in particular, back date fees for something that is not my fault.

I am aware the legal answer and the moral answer don't always align, and had hoped the most logical and sensible thing was to not be retrospectively charged things.

Would there be anyway to find out for sure if no one else paid the ground rent, eg through a FOI request? Wondered if I would have some kind of case for making me pay when others did not?

I understood this new position you've adopted the last time you said it, but without also repeating myself, it's not the question you originally posed when you started this thread, where you asked "can the developer now start charging me".

I would also suggest that it's a stretch to try distort 'not requested' = 'not due' into 'not requested' = 'not liable'. Totally different things and sorry I don't think it's a logical conclusion.

A sensible person, knowing that they haven't been charged ground rent yet that they know they're liable for, would have been putting it to the side for when it was requested.

Of course you think it's a reasonable position that you somehow don't owe it, because you're the one trying to get away with not paying. We see this type of mental gymnastics ad nauseam on this forum across every board (e.g. employees being overpaid, utility providers underestimated bills, etc). As I said in my first post they can ask you for ground rent backdated up to 6 years, and to answer your original question, you are liable for it inside the limitations period.

Not really sure why you keep mentioning other people, as I said in my first reply, it doesn't change anything. They may go after them, they may not, it doesn't effect you or change anything.

GDB2222

If you ever want to sell, won't buyers want all the ground rent paid up to date?

user1977

How much is the ground rent, OP? If it's a tiny amount that may explain why nobody is very excited about invoicing for it.