Variation of lease

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    #16
    Thanks everyone for your help.

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      #17
      Thank you all for your comments. We have decided to wait and see what happens in the forthcoming legislation as ATC suggests.

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        #18
        Many flats with ground rent increasing every 10 years are not able to get a mortgage loan . Taylor Wimpey have set a side £130 Mil for correcting the ground rent demands in their leases . If your flat was built by this company, you should contact the company for correction of the lease.

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          #19
          A ground rent of £150 per annum increasing by 50% every 10 years until it reaches £3,844.33 with 2 years to go before it makes its first doubling would cost around £7,600 plus 0.33% of the value of the flat to have a statutory lease extension

          One of the difficulties in proposing any changes to existing ground rent levels is that it involves interfering with contracts that will have been agreed between professional advisors over a period of a few months. The UK is widely perceived throughout the world as a country subject to a stable legal system and therefore a safe place to do business. Any legislation which in effect tears up contracts which have been freely entered by willing buyers and sellers who had professional representation prior to entering into them will put the UK in the same category of the many foreign countries that cannot be trusted to provide a stable environment in which to do business.

          The law Commission have also warned that sometimes a high ground rent is imposed in return for a lower or no premium at all and it would be manifestly wrong if the landlord right to that income should be interfered with. In the case of a property purchased second hand it may well be argued (particularly if purchased now in light of all the press coverage) that a very high ground rent that rises quite quickly, its financial burden on the property is now more likely as a consequence to be reflected in the price paid for the property. Therefore, disarming it as an onerous ground rent and negating the claim by the current lessee that they have suffered a loss.

          However, there may be some relief if it can be demonstrated that a flat sold with a ground rent such as they type you have referred to did not result in a reduction in the sale price compared to other similar flats sold with less aggressive ground rents.

          The government have used on a number of occasions the phrase “cost effective” rather than cheaper and I wonder if the direction of travel may be in making significant savings in the legal and valuation fees a lessee has to pay in a statutory lease extension. It may also be the case that the cost of a lease extension may be lowered by the lessee not having to buy out the ground rent.



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