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Ground rent under leasehold reform act

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?  

Comments

  • DullGreyGuy
    DullGreyGuy Posts: 17,578 Forumite
    10,000 Posts Second Anniversary Name Dropper
    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?  
    You dont sign a new lease, the old lease gets assigned to you
  • KoalaMSEF
    KoalaMSEF Posts: 118 Forumite
    100 Posts Name Dropper
    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. 
  • eddddy
    eddddy Posts: 17,814 Forumite
    Part of the Furniture 10,000 Posts Name Dropper

    ...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.


  • Bananas1_2
    Bananas1_2 Posts: 14 Forumite
    Ninth Anniversary 10 Posts Combo Breaker
    Thanks for clarifying.  Shame the act didn't go further.
  • RAS
    RAS Posts: 35,069 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    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 nothing
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