Is it worth it

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    Is it worth it

    Bought freehold shop a year ago with flat above sold off on a long lease. Previous owners of 30yrs never chased £5 ground rent or made demand for service charges.Is it worth my while to get embroiled pursueing this setting things straight as they should have been or let things slip. What will the longer term effects potentially be if I persue or if I dont persue.
    ie pros and cons of either action. Anyone out there who can give us some pointers. much appreciated. landlordzy

    There is a time limit on making a demand for ground rent, it may be better to start from this year on-ward, inform the properties there is a new management, and send them the demand per the leasehold agreement.

    It all depends on how long the lease's are (as they get more valuable, the nearer they come to expire), as the freeholder you would be expected to insure the property, and you would get this cost back in service charge. What does the lease say about the service charges and is there a proportion which each property needs to pay.


      Hi Ash many thanks for your reply. Really appreciate that. In the lease there is a clause that talks about service charges. If I persued it how would I go about fixing service charge amount (one that would be deemed reasonable) since there hasnt been one in 30yrs, and should I start the ball rolling simply by asking them to pay before getting tied up with legals to see the response.


        The flat lease will specify what costs they contribute to and you estimate a service charge to cover those.


          Pretty standard I think if you buy a leasehold property and the previous owner has not paid ground rent your sol will ask for 6 years ground rent from the seller as that's what can be back dated and claimed for by the freeholder.

          For the ground rent to be extinguised by a leaseholder it needs to be for a pepper corn and that has been defined to be for less than £1 a year and not collected for 20 years, so in my view you can claim back the last six years ground rent and this going forwards year on year.

          You can get a form from the internet free of charge and do this yourseld without paying any fees, then decide what to do if they decline to pay.

          In the lease for the flat above it will probably outline the services charges/ charges you can make to them etc. You will have to check what they are responsible for.

          Just my personal view take advice before acting on anything I say!

          All the best


            By the sound of it, the op should seek legal advice as regards the service charge.

            With a mixed user building, important to remember that service charges for commercial property are unregulated, whereas for residential property service charges are regulated.

            For example, for residential, the current statutory requirements are in the Landlord and Tenant Act 1985 which has been frequently amended, including by the Commonhold and Leasehold Reform Act 2002. LTA1985 Section 20(1) provides that unless certain "consultation requirements" are (a) "complied with" by the landlord (or service company), or (b) "dispensed with" by the Leasehold Valuation Tribunal the landlord cannot recover more than a specified sum in respect of works for which the service charge would otherwise be greater.


              A big thank you everybody for taking the time to give me pointers. Very much appreciated


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