Ground Rent Capitalisation on Collective Enfranchisment

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    Ground Rent Capitalisation on Collective Enfranchisment

    I've just had a first tier tribunal decision that has determined the capitalised ground rent payable for my flat using a valuation date in Sep 2017. Since that date I have been paying ground rent in the normal way, but now I'm being told that I cannot deduct these post-valuation payments from the tribunal amount. Seems that I have to pay the ground rent twice for a period of over a year. Doesn't make sense logically but is this the common practice?

    #2
    Are you not mixing up two things?

    Your ground rent under your lease runs up to the date of the enfranchisement of your lease, no way out of it it is a legal requirement under your lease. The FTT decision is a payment in lieu of future ground rent from the date of the enfranchisement when you will no longer have a lease. Keep the pressure on to complete enfranchisement asap.

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      #3
      Thank you Tipper. Yes we will press on with the enfranchisement completion. My point though was that the FTT decision was obviously not calculated from the enfranchisement date but from a valuation date which is more than a year ago, so I will end up paying twice for the last year, once in the normal way and once in the FTT calculation. Another way of looking at it is that I have already paid in advance part of the FTT calculation. Anyway I accept that this is the way it's done.

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        #4
        Unless the lease is very short, or the ground rent escalates faster than the interest rate used in the calculation,, the net present value of the future ground rent will not change much in a year.

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          #5
          That's true it will be about the same as one year's ground rent. Still irks me to pay it twice though.

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