Annual Rent Charge - Pro's & Con's of buying it out in full or carry on paying yearly

FrankFalcon

Hi all

My family have been involved in a manufacturing business for over 25 years.  In that 25 years they have been paying an annual fee to a company hundreds of miles away for their ground rent.  This years demand has arrived, but this time with an option to buy it out in full.  I remember watching BBC watchdog where people were hammered when these 'agreements' were sold on to third parties, which in my mind means we should jump and buy out the ground rent now.  On the other hand I remember overhearing a converstaion down the pub last year that went along the lines of the government were clamping down on these rent charge companies...Their game was up etc and because they knew their game was up they were selling off their agreements...which makes me feel suspicious that this is what is going on here.  So, some facts... The family only have 3 years of their 30 year mortgage on the factory building to pay.  They are considering retiring in 3-5 years and possibly selling the building.  Surely, if/when they sell the building they would have to meet this charge anyway?

Does anybody have any advice here? why has this been 'offered' all of a sudden? Is it a fair price?

Thanks all.

DullGreyGuy

The down the pub conversations are probably on leasehold homes not freehold commercial property with rentcharges?

Is it an older building with a rentcharge or is it an estate rentcharge with the building being on a complex?

FrankFalcon

DullGreyGuy said:

The down the pub conversations are probably on leasehold homes not freehold commercial property with rentcharges?

Is it an older building with a rentcharge or is it an estate rentcharge with the building being on a complex?

Absolutely spot on! It was once a huge Mill that was broken up into units in the 60's.  This factory in question takes up 2 of the huge units.

HelpfulLittleHelper

£800 to get it all bought out and never have to worry about it (extending the lease when selling etc)? I'd take that immediatly!

newsgroupmonkey_

HelpfulLittleHelper said:

£800 to get it all bought out and never have to worry about it (extending the lease when selling etc)? I'd take that immediatly!

This. In the grand scheme of things, I'd absolutely be all over this.

daveyjp

OP is talking about a business premises, the invoice relates to a householder so that needs clarifying.

Business premises aren't houses and operate under completely different laws and it will be a business to business transaction so consumer laws don't apply.  The occupier needs to undertake a proper legal review of the lease before jumping early.  There may be landlord obligations contained in the lease which also fall away if the freehold is purchased.