Incorrect Ground Rent

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    Incorrect Ground Rent

    Hi, looking for some advice. Lived in my flat for 20 years, for the past 5 years, the new leaseholder has invoiced me for a ground rent of £200, when the correct ground rent is £50, according to my deeds. Each year I get a letter with account statement showing the "overdue" balance plus 8% compound interest. There is no telephone number or contact name, just an email address and a c/o postal address. I've written 30+ emails and sent multiple recorded delivery letters all with zero response. The "outstanding" balance is now a tidy sum...

    Does anyone have any advise other than see a solicitor and get legal?? Loathe to spend money on this but can't see any other route given the Leaseholder won't respond.
    Many thanks

    #2
    Leaseholders get invoiced for ground rent; they don't invoice for it!

    You should be able to get a name for the FREEholder, for £3, from the Land Registry.

    Comment


      #3
      What is the outstanding balance owed ? Any arrears over £350 may allow the freeholder to start legal proceedings for forfeiture of your lease.

      You should offer to pay the £50 ground rent owed and send a cheque by recorded delivery to the address.

      Do you have a copy of the lease showing the lease term 99 years or 125 years etc. and ground rent payment .

      Comment


        #4
        Are you sure that the £50 per annum that you are referring to has not risen to £200 per annum because of a ground rent review clause? This seems like a possibility, bearing in mind that you have lived at the flat for 20 years and have only been receiving the £200 per annum demands for the last 5 years ...

        Comment


          #5
          Lots of questions here.

          As mentioned check that the ground is £50 and that the lease doesnt have a mechanism to rise.

          If the FH has not billed you for it in compliance with - https://www.lease-advice.org/article...anding-notice/ then it is not payable but the FH can in theory wait 6 years and send a compliant demand and you will have to pay (after 6 years it would be statute barred).

          In practise it may be advisable to pay GR even if not demanded as this eliminates any chance of the FH using forfeiture for this or any other outstanding amount. Or you could just put the £50 aside every year.

          It is unlikely that any interest yet alone compound interest would be payable unless the lease specifically states it is.

          Also if he was to take legal action the court would frown upon the fact that you have tried to settl;e this but he has just ignored you and may order costs against him which could outweigh any GR he does get.

          The advice therefore would be to look at the demands to see if they comply with the law, if not you owe nothing, if they do then send the £250 you owe...the ball is in his court..I cant see the point of you getting a solicitor at this stage to prove you dont owe something.

          Have a look at the CPR rules especially pre-litigation and mediation etc and make sure you comply even if he doesnt - https://www.justice.gov.uk/courts/procedure-rules/civil
          Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

          I do not accept any liability to you in relation to the advice given.

          It is always recommended you seek further advice from a solicitor or legal expert.

          Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

          Comment


            #6
            Thanks for the answers, the ground rent did rise to 100 per annum from 2017, for the next 33 years. ( I left this out to keep it simple). I have been paying the correct amount ie £50 and then £100 per annum. I've always paid within 1 week of the invoice arriving. The previous freeholder invoiced for £50 and I payed this. So far according to the freeholder I'm £650 (plus compounded interest) in arrears, I'm 100% certain that i have been paying the correct amount.

            For completeness I also pay Annual Insurance to the Freeholder and a quarterly Service charge to a management company retained by the Freeholder. All are paid promptly. The Freeholder is an Llp company rather than an individual.

            I sent a recorded delivery letter 2 weeks ago, with proof of payments and another this week. I'm emailing every month but the complete lack of any response is extremely annoying and completely unprofessional. I've kept copies of all correspondence and the Royal Mail recorded delivery receipts, pretty much fills a lever-arch file.

            I'm conscious that this may just be a long term play by the Freeholder to bully me into paying extra or give him the opportunity to push for Forfeiture. Obviously at some time I'm going to have to get the freeholder to extend.... or outlive him

            Comment


              #7
              Aha..but you are sure that the GR is now £100 and not £200. So where does he get the figure of £200 from ?*

              *At my flat when I first bought it a deed of variation was proposed to tidy up the lease, it was only a few minor matters but the Fh put forward a rise in GR, I refused and said Id walk away so this never went ahead, but many years later (about 11) I realised I had been overpaying, I asked for a refund but he ignored me so i started court action, this cost him dearly as he had to repay me plus the court interest of 8% which added to a nice sum.

              It sounds as if you are doing everything right, let him chase you through the courts..it will be his loss as it appears not only are you paying the correct amounts but he is acting like a jerk and deserves to be penalised by the courts, (they are very busy these days and dont like cases that could of been settled easily).

              Also its best if you dont refer to invoices.. demands is better terminology for GR and SC issues and its what the legislation uses.

              Be aware that GR and SC/Insurance are separate entities, SCs are the remit of FTT courts whereas GR is not and is solely the remit of the County Court system.
              Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

              I do not accept any liability to you in relation to the advice given.

              It is always recommended you seek further advice from a solicitor or legal expert.

              Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

              Comment


                #8
                Andydd, thanks for the response. You asked where did the £200 come from that's the question I have been asking the freeholder for the last 3.5 years.

                Im interested if I can somehow get him to formally acknowledge my correct ground rent and correct his demands. Is there a trade association of ombudsman for freeholders?

                Comment


                  #9
                  You hold the flat under a lease so you are the leaseholder. The freeholder owns the property and sends you the demand for payment of annual ground rent.

                  You should study your lease document and identify whether it is a 99 years lease or 125 years lease and the starting date of thee lease..

                  Normally for the 99 years lease, the ground rent will rise to double after every 33 years.. So you pay £50 at start , £100 after 33 years and £200 after the 66th year .

                  Normally for 125 years lease, the ground rent will rise to double after every 25 years . So you pay £50 at start, £100 after 25 years and £200 after 50 years .

                  Due to Mortgage lenders not willing to offer mortgage loans on leases below 70 years unexpired , you should have applied for a statutory 90 years lease extension and reduced the ground rent to Nil.

                  The best time to extend is before the lease falls below 83 years and if the application for extension is made after lease has fallen below 80 years, there is higher cost to pay due to the marriage value included in the formula for calculating compensation payable to landlord.

                  You can download a free guide to statutory 90 years lease extension from www.lease-advice.org.

                  Comment


                    #10
                    No. There is no trade association or ombudsman for freeholders. If you are absolutely, positively sure that your ground rent should be £100 and not £200 - just sit tight and wait for the freeholder to attempt some kind of enforcement action against you for the 'arrears'. At that stage, your defence will be that your lease states that the ground rent payable is only £100 per annum and not £200 per annum.

                    Comment


                      #11
                      Gordon999,

                      EErr..no..there is no 'normal' for leases, they are all different..in my experience most older leases have a static amount of GR..(mine is £30), newer leases are more likely to have escalation clauses, and as weve seen in the news recently, some would reach such high levels as to make the property unsellable.
                      Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                      I do not accept any liability to you in relation to the advice given.

                      It is always recommended you seek further advice from a solicitor or legal expert.

                      Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                      Comment


                        #12
                        Lorimer,

                        The clever thing to do is wait for them to start a claim and jump straight in with an application to strike out as it has no merit, as this is pre-allocation. i.e not on small track costs rules, you can ask for your costs (in theory a solicitor if you used one or your time at £18 per hour plus court fees, etc.)
                        Advice given is based on my experience representing myself as a leaseholder both in the County Court and at Leasehold Valuation Tribunals.

                        I do not accept any liability to you in relation to the advice given.

                        It is always recommended you seek further advice from a solicitor or legal expert.

                        Always read your lease first, it is the legally binding contract between leaseholder and freeholder.

                        Comment


                          #13
                          Perplexed,

                          Your worry about the incorrect ground rent may be trivial compared to the cost for extending your lease.

                          If your lease has fallen from 99 years to 66 years unexpired , then you should be looking at your liability for cost of statutory 90 years lease extension because you cannot sell to anyone except a cash buyer . Most lenders will not offer mortgage loans on leases fallen below 70 years.

                          The cost of lease extension is in this free guide to download from LEASE :

                          https://www.lease-advice.org/advice-...ion-valuation/

                          There is an example showing cost of lease extension with 68 years remaining coming to £10,700 based on property price valued around £150K..

                          Comment

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