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Ground rent under leasehold reform act
Bananas1_2
Posts: 14 Forumite
If I buy a flat now which the previous owner paid ground rent on, do I just pay a peppercorn rent because the lease I sign is a new lease between me and the freeholder, or am I considered tied in to the previous owner's lease, and would only have a 'new lease' if the term was extended or something? I notice that the estate agent details for flats are still advertising ground rents in the hundreds, so presume buyers are stuck with that?
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You dont sign a new lease, the old lease gets assigned to youBananas1_2 said:If I buy a flat now which the previous owner paid ground rent on, do I just pay a peppercorn rent because the lease I sign is a new lease between me and the freeholder, or am I considered tied in to the previous owner's lease, and would only have a 'new lease' if the term was extended or something? I notice that the estate agent details for flats are still advertising ground rents in the hundreds, so presume buyers are stuck with that?0 -
The lease is transferred to the buyer from the seller. There is no new lease, unless the lease is extended but that can be complicated, depending on the specifics. If the flat is built after the reform act kicks in, that's different.0
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Bananas1_2 said:
...because the lease I sign is a new lease between me and the freeholder, or am I considered tied in to the previous owner's lease...
As above, in simple terms...
The seller owns a lease. You are buying that lease from the seller. You will be paying the seller a lump of money for that lease.
You are not buying anything from the freeholder. You are not paying the freeholder any money. (The freeholder isn't really involved in the transaction - it's just between you and the seller. But the freeholder has to do a bit of admin work - so they get paid some fees to cover their costs.)
So you will take on all the rights and responsibilities described in the lease - including the responsibility to pay any ground rent stated in the lease, and pay any service charges described in the lease, and follow any 'rules' stated in the lease.
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Thanks for clarifying. Shame the act didn't go further.0
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There isn't an Act.
There have been numerous public announcements over the last 15 years but no law passed.If you've have not made a mistake, you've made nothing0
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