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    • Galanova
    • By Galanova 6th Mar 18, 1:28 PM
    • 16Posts
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    Galanova
    Dispute over ground rent threatening the sale
    • #1
    • 6th Mar 18, 1:28 PM
    Dispute over ground rent threatening the sale 6th Mar 18 at 1:28 PM
    Hi all

    I wonder if any of you have been in such situation and if you can recommend anything.
    I am selling my flat and buying a house. A house purchase is ready for exchange and the flat sale is still dragging. Today I found out that the reason of the delay is that the solicitors of the buyer found out that under the lease the owner is not liable for ground rent. When I was buying the flat I was not made aware of this and have been paying ground rent.
    Anyway, we are speaking about 30 a year. Now the buyer's solicitors are arguing with the management company trying to get their confirmation that the ground rent is not payable. The management company is refusing to give this confirmation.
    To me it sounds like a potential for a very lengthy dispute.
    The buyer is a property investor who wants to buy and let the flat. Surely he understands that he is losing much more in the argument over 30 a year?? Especially considering that when he was making an offer, he asked for 2500 discount for no reason and I gave it to him?

    What would you do in this situation?
Page 1
    • eddddy
    • By eddddy 6th Mar 18, 2:12 PM
    • 6,349 Posts
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    eddddy
    • #2
    • 6th Mar 18, 2:12 PM
    • #2
    • 6th Mar 18, 2:12 PM
    So are you saying that the lease says the ground rent is zero, but you are billed 30 for ground rent each year?

    (Has there been a lease extension on the property which reduced the ground rent from 30 to zero? In that case, the lease might say the GR is 30, but the deed of variation says it's zero.)

    What would you do in this situation?
    Originally posted by Galanova
    Leave it to the buyer to do whatever they want. If the lease is clear that the GR is zero, I can't see that there is an issue.

    Is the buyer suggesting that you should do something?
    • Tom99
    • By Tom99 6th Mar 18, 2:24 PM
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    Tom99
    • #3
    • 6th Mar 18, 2:24 PM
    • #3
    • 6th Mar 18, 2:24 PM
    Look for yourself at the lease or deed of variation, your buyer does not need to ask the management company what ground rent is payable.
    • Galanova
    • By Galanova 6th Mar 18, 3:52 PM
    • 16 Posts
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    Galanova
    • #4
    • 6th Mar 18, 3:52 PM
    • #4
    • 6th Mar 18, 3:52 PM
    I have no deed of variation and I am still to look through the lease as it is quite a long document.
    But for now I've checked what info was given to me in the sales pack by the solicitors when I was buying and I see that it states the ground rent is "peppercorn rent". Do I get it right that in this case it is up to the free holder to decide whether to charge the ground rent or not?
    I know that the previous owner of the flat also paid ground rent.
    • Tom99
    • By Tom99 6th Mar 18, 4:17 PM
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    Tom99
    • #5
    • 6th Mar 18, 4:17 PM
    • #5
    • 6th Mar 18, 4:17 PM
    I have no deed of variation and I am still to look through the lease as it is quite a long document.
    But for now I've checked what info was given to me in the sales pack by the solicitors when I was buying and I see that it states the ground rent is "peppercorn rent". Do I get it right that in this case it is up to the free holder to decide whether to charge the ground rent or not?
    I know that the previous owner of the flat also paid ground rent.
    Originally posted by Galanova
    A peppercorn rent means exactly that, one peppercorn, no more no less.
    • davidmcn
    • By davidmcn 6th Mar 18, 4:21 PM
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    davidmcn
    • #6
    • 6th Mar 18, 4:21 PM
    • #6
    • 6th Mar 18, 4:21 PM
    What would you do in this situation?
    Originally posted by Galanova
    Ask the solicitor whether the current issue really is just over a liability of 30 a year (just in case you've misunderstood), and if so WTF they (and/or the other party) are playing at?
    • moneyistooshorttomention
    • By moneyistooshorttomention 6th Mar 18, 5:04 PM
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    moneyistooshorttomention
    • #7
    • 6th Mar 18, 5:04 PM
    • #7
    • 6th Mar 18, 5:04 PM

    What would you do in this situation?
    Originally posted by Galanova
    Be very annoyed with myself that I'd been daft enough to pay money I wasn't due to pay for some years now.

    Admitted 30pa isnt much - but what your buyer (this buyer or any other buyer) is going to be concerned about is whether "real" rises might get imposed on that at some future point. Perhaps from some other company buying out the right to those non-existent ground rents and then proceeding to shove the non-existent cost up a lot.

    They don't want to be the ones at risk of any sort of legal issues involved in getting this lot to admit that the charge simply doesn't exist - and hence you are the one that has to sort this out before they'll buy it.

    Fair enough - imo.
    WAY TO GO IRELAND! - WELCOME TO THE 21ST CENTURY

    • Tom99
    • By Tom99 6th Mar 18, 5:11 PM
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    Tom99
    • #8
    • 6th Mar 18, 5:11 PM
    • #8
    • 6th Mar 18, 5:11 PM
    Be very annoyed with myself that I'd been daft enough to pay money I wasn't due to pay for some years now.

    Admitted 30pa isnt much - but what your buyer (this buyer or any other buyer) is going to be concerned about is whether "real" rises might get imposed on that at some future point. Perhaps from some other company buying out the right to those non-existent ground rents and then proceeding to shove the non-existent cost up a lot.

    They don't want to be the ones at risk of any sort of legal issues involved in getting this lot to admit that the charge simply doesn't exist - and hence you are the one that has to sort this out before they'll buy it.

    Fair enough - imo.
    Originally posted by moneyistooshorttomention
    The ground rent is not 'non-existent' it one peppercorn and this landlord or any other landlord can't shove it up any higher than one peppercorn.
    The OP is owed a refund.
    • eddddy
    • By eddddy 6th Mar 18, 5:14 PM
    • 6,349 Posts
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    eddddy
    • #9
    • 6th Mar 18, 5:14 PM
    • #9
    • 6th Mar 18, 5:14 PM
    ....but what your buyer (this buyer or any other buyer) is going to be concerned about is whether "real" rises might get imposed on that at some future point. Perhaps from some other company buying out the right to those non-existent ground rents and then proceeding to shove the non-existent cost up a lot.
    Originally posted by moneyistooshorttomention
    That's not possible.

    A lease is a legal agreement - if the lease says the ground rent is a peppercorn (i.e. zero) for the term of the lease, the freeholder cannot change that.

    (The only way it can be changed is if the leaseholder and freeholder both agree to change it.)
    • Galanova
    • By Galanova 6th Mar 18, 5:48 PM
    • 16 Posts
    • 1 Thanks
    Galanova
    Thanks to everyone who has answered.
    I think things are a bit clearer now. If the ground rent is not payable and the management company still charges it (for the reason I now want to clarify) then probably for the buyer it's not a matter of paying 30 annually and not that they don't want to deal with unexpected rises of rent (it being impossible) but probably it's a matter of trying to sell the flat in future and having potential problems with the management company (for example not issuing lease pack until he pays the ground rent he doesn't want to pay).
    Would be interesting to hear his solicitor's explanation and how they think this can be resolved...
    • moneyistooshorttomention
    • By moneyistooshorttomention 6th Mar 18, 5:49 PM
    • 15,633 Posts
    • 43,376 Thanks
    moneyistooshorttomention
    The ground rent is not 'non-existent' it one peppercorn and this landlord or any other landlord can't shove it up any higher than one peppercorn.
    The OP is owed a refund.
    Originally posted by Tom99
    ....................
    WAY TO GO IRELAND! - WELCOME TO THE 21ST CENTURY

    • moneyistooshorttomention
    • By moneyistooshorttomention 6th Mar 18, 5:52 PM
    • 15,633 Posts
    • 43,376 Thanks
    moneyistooshorttomention
    Thanks to everyone who has answered.
    I think things are a bit clearer now. If the ground rent is not payable and the management company still charges it (for the reason I now want to clarify) then probably for the buyer it's not a matter of paying 30 annually and not that they don't want to deal with unexpected rises of rent (it being impossible) but probably it's a matter of trying to sell the flat in future and having potential problems with the management company (for example not issuing lease pack until he pays the ground rent he doesn't want to pay).
    Would be interesting to hear his solicitor's explanation and how they think this can be resolved...
    Originally posted by Galanova
    Admits I'd be inclined, in your position, to write them a recorded delivery letter saying "Herewith enclosed 500 peppercorns - and this will cover the ground rent for the next 500 years (whoever owns the place). BTW - you owe me 30 times x number of years and I look forward to receiving a cheque for that amount soonest".
    WAY TO GO IRELAND! - WELCOME TO THE 21ST CENTURY

    • Galanova
    • By Galanova 6th Mar 18, 5:58 PM
    • 16 Posts
    • 1 Thanks
    Galanova
    It would be interesting to see their reaction )
    Seriously, I wonder on what grounds the managing company is doing that now delaying the sale which may cost me much more than 30 a year... This really needs some looking into.
    • Richard Webster
    • By Richard Webster 6th Mar 18, 6:00 PM
    • 7,437 Posts
    • 7,159 Thanks
    Richard Webster
    It is possible that there is a separate charge payable to a management company for some services such as cutting a bit of grass outside the block. This would be a service charge rather than ground rent but maybe people got mixed up as to exactly what it was and what ti was for?
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
    • Galanova
    • By Galanova 6th Mar 18, 6:09 PM
    • 16 Posts
    • 1 Thanks
    Galanova
    It is possible that there is a separate charge payable to a management company for some services such as cutting a bit of grass outside the block. This would be a service charge rather than ground rent but maybe people got mixed up as to exactly what it was and what ti was for?
    Originally posted by Richard Webster
    There is service charge payable but I was definitely told by my solicitors that this was about ground rent... I am still waiting for some comments from the seller/his solicitors as it was just today I discovered it. So I have to rely on what my solicitors told me for the moment being.
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