Notice of Transfer fee - forfeit of leasehold property

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    Notice of Transfer fee - forfeit of leasehold property

    Hi Everyone,

    I bought a commercial property on a long leasehold around 2 years ago and have just transferred the property to one of my family members however I have a received a letter today from 'landlords' solicitor suggesting that I have broken the lease conditions by not serving notice of transfer to the landlord and will have to cover registration fee, solicitors fee and previous 10 years ground rent as well as admin fees. I have attached a copy of the letter sent to me. Can you please advise me of what I need to do next...

    All the help is appreciated..

    Thanks,

    IMG_0697 (2).jpg

    #2
    What do you mean " previous 10 years ground rent"? How much is the ground rent? How long ago was the transfer - you say "just".

    Pending your response my inclination would be to reply briefly: "Thank you for your letter. I enclose a cheque in the amount of xx to cover ground rent and your fee for administration of the transfer (if that is specified in the lease)"

    and then leave them to sue you for their "legal fees" and to follow through on their threat of forfeitrure.

    It is an odd letter - why for example "incapable of remedy" - the remedy is obvious albeit you cannot remedy the doing of it in time. They say they are going to detail the loss and damages they have suffered and then fail to do so -- or have you only sent us part of the letter.

    Comment


      #3
      Hi thanks for your reply,

      By "just" I meant it was transferred around two months ago. Ground rent is around £5.55 a year so it isn't that much.

      The detail of loss isn't anywhere. The only thing on another page is breakdown of admin fee and the ground rent since mid 2000. Maybe they refer to that bullet point list as details of loss and damages suffered?

      I think legal fees are excessive for writing one letter...

      Does the first bullet point states I still need to send notice of transfer even if I pay the solicitor?

      Thanks,

      Comment


        #4
        I think we need to get more facts straight before advising you:


        a) Were you served proper notice each year since 2006 that you had to pay ground rent - i.e. did you get a letter at whatever address they use for you to say you owe it, and what did that letter say?
        b) If you did get the above then did you fail to pay it? Why?
        c) You say the gap between transfer and this letter was two months. How did they find out about this transfer? They are unlikely to obtain land registry records every 2 weeks, so how?
        d) What exactly does your lease say about notifying them/any special stipulations re timescale etc?
        e) Does the lease specify a fee for transfer?

        As an aside -- if you did this transfer in one step, do you plan to notify HMRC about the capital gain? Did you get the property valued before transfer? Given you have held it a while you will owe a lot of tax most probably.

        Comment


          #5
          Hi please find the answers below to your questions,
          A) I have only owned property for 2 years so didn't get any request to pay for ground rent until now . This is the first letter I have received from them asking for anything..
          B) as above
          C) I'm not really sure how they found out about the transfer maybe they were notified by the solicitor who transferred the property.
          D) I have not had a look at lease to see what the actual requirement for registration fee is?if there is a registration fee do I still need to give notice of transfer after paying all this fee resulting in further cost of my solicitor to draft a notice of transfer?
          E) I am not sure as I have not read the lease to see whether it does.

          I didn't get anything financially it was transferred without any cash gain.


          Thanks

          Comment


            #6
            a) Well then none of this makes any sense. Were there outstanding ground rents when you bought it?
            b) If you don't get requests for ground rent you don't have to pay ground rent. They cannot go back 10 years anyway.
            c) Well then it seems they were notified of the transfer -- perhaps they did not get it in the form they want. Have you asked your solicitor. Again this does not make sense.
            d) Look at the lease. There is no way we can help you otherwise
            e) Look at the lease. There is no way we can help you otherwise

            These are probably scam artists trying to make money out of very-low-value ground-rent properties. I would not pay them anything apart from ground rent (in response to a proper demand for it) until you understand what is going on. You need to do some work.

            How do you know there was no cash gain. CGT depends on the change in value (based on valuations). Whether actual cash changed hands, or how much you charged for it is not relevant.

            Comment


              #7
              5. Within one month after every assignment assent transfer or underlease to produce the same to the Lessor’s solicitors for registration and to pay a reasonable fee of not less than £20 plus VAT thereon in respect thereof

              6. Provided always and it is hereby agreed and declared that if and whenever any part of the said rent hereby reserved shall be unpaid for twenty eight days after the day on which the same ought to have been paid (although no formal or legal demand shall have been made therefore) or in case of the breach or non-performance or non-observance of any of the covenants and conditions herein contained (whether negative or affirmative) on the part of the Lessees or their executors administrators or assigns then and in every or any such case it shall be lawful for the Lessor his executors administrators and assigns to enter at any time thereafter into and upon the leased land to repossess and enjoy as in their former estate and the said term hereby created shall thereupon absolutely cease and determine anything herein contained to the contrary notwithstanding
              Many leases will include Clause 5 as a Lessee's covenant and will also stipulate what can happen about non payment of rent or a breach of a covenant.

              A firm of solictors acting for the new Lessee ought to have provided the Lessor's solicitor with the notice of assignment and also sent a cheque to cover the fees mentioned in the lease.

              That would have been a requirement of the instructiion to act as conveyancer.

              It would be sensible to seek clarification from your conveyancer as to why his did not happen after you had completed the purchase.

              It may well be that this was negligence on the part of your conveyancer who should be responsible for sorting out this matter at no further cost to you.

              Comment


                #8
                AFAIK Ground Rent is not payable if it not demanded per S166 (regardless of what it says in the lease about paying without receiving this). Perhaps others can confirm.

                And I suspect that the bit about entering and taking over your property if XYZ is as much hot air.

                The fact that these solicitors wrote so rapidly suggests to me that they are making money through intimidation - how else to realise value in a 999 year lease paying £5 per year.

                Additionally, they presumably did register the assignment two years ago, so why are they only now claiming missing ground rent going back 10 years?

                Comment


                  #9
                  Assuming it has one, quote the clause in the lease which allows the landlord to charge an administration fee.

                  Is the letter addressed to you or the person to whom you transferred the lease? I am not clear if the missing notice relates to when you acquired the property or to the recent transfer. Was a solicitor employed in either case and, if so, did he not serve notice?

                  Did the solicitor who acted on the purchase check the ground rent was paid? If he did he can be asked to produce the evidence and, if he did not, why he did not.

                  Comment

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