Ground Rent increases linked to property value

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    Ground Rent increases linked to property value

    Any insights from those experienced in GR would be much appreciated.
    We have a flat where the Ground Rent is reviewed every 21 years and is due fore review on 1/1/2023.
    The GR started at £150 per annum.

    The explanation in the lease regarding the review method is as follows ' The rent shall be subject to review on each 21st anniversary of the commencement date and shall be the sum of the rent plus such sum as shall be the difference (in percentage terms) between the Review Value of the Block and the First Value of the Block BUT so that such reviewed rent shall never equal or exceed such a sum as would in appropriate circumstances create an inhibition on the premium capable of being charged on an assignment of the Demised Premises in the same manner as set out in section 127 and Schedule 18 Part !! of the Rent Act 1977 or any amending or similar legislation in which case the Rent shall be £1.00 less than the sum which would otherwise be charged rather than the amount which creates an inhibition on the premium.' What does the wording in italics mean?

    #2
    To prevent landlords and tenants assigning from charging key money on short term tenancies, there was a time when if the rent of a residential property exceeded two-thirds of the rateable value that payment of a premium was illegal. The person receiving the premium was guilty of an offence and liable to repay the premium. With the introduction of the poll tax it all started to get a bit involved. At some later point the law was changed and it now seems that for long leases anything goes. I missed what legislation did that and do not know the current rules.

    The question here (to which I do not have an answer) is whether the words in italics are to apply even though the law may have changed since the lease was granted.

    Comment


      #3
      I suggest that you send your enquiry to the legal advisor at LEASE ( www.lease-advice.org )

      Comment

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