Excessive Peppercorn Rent

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    Excessive Peppercorn Rent

    Hi, first time here, thanks in advance for any help

    I purchased a flat in October 18 with a long lease (15 years into 999 years) and peppercorn ground rent. There are 4 flats in the building.

    My understanding of peppercorn rent is that it is a nominal amount, from £0-£20. However the freeholder (who lives in one of the flats) has this month asked for a payment of £125. She has given no explanation as to why it's £125, and didn't seem to even be aware there was a lease contract that we both need to abide by.

    She also ignored multiple messages when I previously asked for a copy of the buildings insurance, so I am concerned with her understanding of her responsibilities.

    I got a copy of the lease as I was sure it didn't state £125, but when I politely contacted the freeholder to arrange a time to discuss she just got angry with me.

    Apparently the previous freeholder was charging £125 and the current freeholder just continued with this.

    My question is..... Is £125 a reasonable amount to charge for peppercorn rent?

    If not, is it my responsibility to prove this is excessive, or her responsibility to prove it is not?

    Or do I have no choice but to pay because that's what the previous owner did?

    Many thanks!

    #2
    What is the exact wording in your lease regarding the amount of ground rent?

    'Peppercorn rent' is a term that can be used to describe any rent that is a nominal amount, typically something that will not be worth the landlord demanding.
    If your lease states (as mine does) that the annual ground rent is "one peppercorn", then that is exactly what the landlord is entitled to demand - and it would cost then more to demand it than a peppercorn is worth.

    Comment


      #3
      I guess an estate agent might use peppercorn for a single figure rent, but what matters is the lease. If it says peppercorn, buy some from your local supermarket. They should last a few hundred years. If it doesn't, it will specify an amount and possibly rules for dealing with inflation. In that case that amount is due.

      Comment


        #4
        Are you a freeholder also otherwise
        A peppercorn rent is just that, very nominal, often in the region of £10 per year & generally fixed for the duration of the lease. It is usually termed as ground rent.
        A lease is legally binding & cannot be changed to benefit the freeholder I'm afraid.
        If the tenant of the flat is just that, a rental tenant & not a leaseholder then things may be a bit different.

        Comment


          #5
          Thanks for your prompt replies. To answer a couple of your questions:

          - I am the leaseholder of the flat
          - The lease states 'ground rent of a peppercorn'

          It's very frustrating as the freehdolder seems to feel she is in the right merely because she is replicating what the previous freeholder was doing, and because the other 2 leaseholders have not objected.

          I also have another question, not sure if I need to start a new post, please tell me if I do ......

          I paid towards the buildings insurance in December, however when I requested a copy of the insurance certificate / details of the policy; the freeholder was very unresponsive. Again, I think she feels this isn't her responsibility and she is just doing me a favour.

          My question is...... I have read that, once requested, the freeholder needs to provide this information within 21 days. Is this correct? If she doesn't what are my options? Is she commiting an offence?

          Thanks again for your help

          Comment


            #6
            It is a criminal offence with a fine of up to £2,500 (level 4 on the standard scale). I assume that the prosecuting authority is the local council housing authority. You are likely to have difficulty getting them to actually prosecute as it costs them money to do so.

            Comment


              #7
              Originally posted by Jazzgill View Post
              The lease states 'ground rent of a peppercorn'
              Then that is all that you need to pay each year - "a peppercorn" or (if you are willing to offer this and the freeholder accepts it) the monetary value of a peppercorn.
              £1 buys quite a lot of peppercorns at the moment, £125 would probably buy more than is needed to pay for the entire remaining term of your lease.
              Ground rent also needs to be demanded properly, with the correct summary of rights etc. enclosed - but that's pretty much irrelevant in your case.



              Originally posted by Jazzgill View Post
              It's very frustrating as the freehdolder seems to feel she is in the right merely because she is replicating what the previous freeholder was doing, and because the other 2 leaseholders have not objected.
              Then you may have to 'educate' the freeholder.

              Especially in your circumstances, where your freeholder is also one of your neighbours, I would suggest that you are as tactful as possible when doing this. Not only do you need as good a leaseholder - freeholder relationship as possible (for when there are maintenance problems etc. that need to be sorted), you would also no doubt prefer to have neighbours who you are on good terms with.

              I would continue to try and politely get the freeholder to meet with you, and perhaps suggest that she contacts the leasehold advisory service (lease-advice.org).



              Originally posted by Jazzgill View Post
              I paid towards the buildings insurance in December, however when I requested a copy of the insurance certificate / details of the policy; the freeholder was very unresponsive. Again, I think she feels this isn't her responsibility and she is just doing me a favour.

              My question is...... I have read that, once requested, the freeholder needs to provide this information within 21 days. Is this correct? If she doesn't what are my options? Is she commiting an offence?

              Thanks again for your help
              You are entitled to request a summary of insurance which should be provided within 30 days. Once you have the summary (perhaps even if you don't have it - the relevant schedule of the Landlord and Tenant Act 1985 isn't clear about this) you have the right to request further information is provided (or perhaps only the right to view relevant documents and take your own copies), which has to be provided within 21 days.

              The reality is that there is very little that you can do if the information isn't provided - although it won't be looked at favourably if a leaseholder fails to provide this information and the dispute later ends up in a court or tribunal.

              Again, the freeholder needs to learn what her responsibilities are.

              Comment


                #8
                I weighed out some peppercorns, and they averaged 0.048 grams. They were in a 275 gram nett jar. One jar should supply enough ground rent for the full term for all four leaseholders, and still leave plenty of margin!

                £125 is actually half the amount a government report thinks should be the maximum for properties worth over £250k.

                Comment


                  #9
                  Jazzgill,

                  Go to LEASE web site and print off a copy of their form, request to have sight of invoice, insurance document and policy then send to freeholder. You request is to see the documents then turn up at the place where its held and ask to see it, keep on asking at least in writing three times.

                  Comment


                    #10
                    Thanks to all, your honest feedback has lifted a little weight off my shoulders.

                    I have remained polite and respectful through the whole process, I definitely agree that it's important to stay on good terms with the freeholder and discuss things in a mature way.

                    At the moment I think she believes I'm 'cheating' her because her argument seems to be 'that's what I was told and nobody else has disputed it'.

                    I just hope she understands this is a serious matter and it's in her interests to understand how things work and her responsibilities.

                    I have no interest in making her life difficult, I just want to be treated fairly.

                    I have arranged a telephone appointment with LEASE myself, and will suggest she does the same.

                    Fingers crossed common sense will prevail!

                    Comment


                      #11
                      Originally posted by Jazzgill View Post

                      At the moment I think she believes I'm 'cheating' her because her argument seems to be 'that's what I was told and nobody else has disputed it'.
                      The simple answer to that is "Then you were lied to, and your redress (if any) is with whoever told you that. By the way, here is your peppercorn." (and give her a peppercorn - but ask for a receipt).

                      Comment


                        #12
                        Originally posted by Jazzgill View Post
                        At the moment I think she believes I'm 'cheating' her because her argument seems to be 'that's what I was told and nobody else has disputed it'.
                        She may well have been lied to and cheated, it depends what she was told when she was sold the freehold, and whether the price she paid for it was based on the belief that she would be paid £125 per year by each of the other leaseholders.

                        It is also possible that the other leases do require £125 per annum ground rent to be paid (it is not necessarily the case that all leases in the block will be the same in this regard).

                        Comment


                          #13
                          On a different subject, you really do need to make sure that the freeholder understands her responsibilities with regard to building insurance and maintenance as a matter of urgency.

                          Obviously the probability that there will be major damage to your block is relatively low, but you don't want to be in a situation where a fire (or something else) seriously damages the block and you find out that there is no suitable block insurance policy so there is no payout for repair. In this situation you could sue the freeholder, but that won't do much good if she doesn't have enough capital/ property to cover the costs.
                          A lack of maintenance will also negatively affect both the value of your property and living conditions.

                          Comment


                            #14
                            I think that you should invite your freeholder to seek legal advice.

                            Comment


                              #15
                              Here is the free guide to statutory lease extension and you can download from LEASE .

                              You can print the first page about "peppercorn ground rent" which means no payment and send to your freeholder:

                              https://www.lease-advice.org/advice-...tting-started/

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