Sub-letting leasehold: does L or T pay the ground rent?

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  • Sub-letting leasehold: does L or T pay the ground rent?

    Hi,

    New to this so this might be a stupid question...

    I am just about to rent out my flat..but who should pay the ground rent/service charges.. me or the tenant?

    thanx

    rob

  • #2
    Either put it into your AST as a condition of rental, or work out what your rent is and stick it on top. The first option is probably more honest
    I offer no guarantee that anything I say is correct. wysiwyg

    Comment


    • #3
      The ground rent is a charge that is covered by you as the lanldord, as are the insurances on the building and the service charges. Tenants dont normally pay these at all.

      Regards

      pebble - effective landlord solutions
      www.pebbleonline.net

      Comment


      • #4
        Originally posted by pebble View Post
        The ground rent is a charge that is covered by you as the lanldord, as are the insurances on the building and the service charges. Tenants dont normally pay these at all.

        Regards

        pebble - effective landlord solutions
        www.pebbleonline.net
        I agree. T should be responsible for only:
        a. rent as per AST;
        b. outgoings such as CT/Water Rates (if AST so provides);
        c. electric/gas/telephone accounts in any case; and
        d. contents insurance premium (whether contents owned by L or by T).

        L should remain responsible for:
        a. ground rent (if leasehold);
        b. property insurance premium; and
        c. service charge (if flat).
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


        • #5
          Landlord made tenants pay his ground rent bill

          Two pensioners told me their Landlord showed them a ground rent bill in his own name for £15, the Landlord told them that they had to pay the £15 ground rent, so they asked their Landlord for the invoice, but the Landlord said he could not give them the bill because it was in his name.

          We are Landlords, and we pay the ground rent in respect of the properties we rent out.

          I believe the Landlord in question should have paid his own ground rent in respect of the property he rents to these two pensioners, & who are not well off, as £15 is a lot of money to them.

          Can other members of the forum let me know if the Landlord was legally entitled to ask his tenants to pay the ground rent which they told me, they paid yesterday in cash at the post office. In my opinion their Landlord was taking advantage of their innocence.
          moonface

          Comment


          • #6
            It all depends on the tenancy agreement which the tenants signed when they took up the lease to their home. If they were then required in this to pay this ground rent then they should do so.
            Normally, the failure to pay ground rent on a long term lease (where the landlord is the lessee) could potentially cause the landlord to loose his property and so to require a short term AST holding tenant to do this is extremely unwise. The normal monthly rent charged to the short term tenant should include this ground rent payment. I do this as a landlord as do most of my colleagues.
            If there is no mention of this in the short term AST then the landlord is clearly trying it on and to make such a payment should be refused. Has he requested this rent payment, in addition to the ususl monthly rent before?

            P.P.
            Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

            Comment


            • #7
              Thank you P. Pilcher

              I do not think ground rent is mentioned in the 6 month short term tenancy agreement they signed when they moved in, but I will certainly take a look at the agreement. I can confirm their landlord never mentioned anything about their paying the Landlords £15 annual ground rent bill.

              This matter shows their Landlord in a bad light, because the Landlord is aware his tenants were evicted from their last home through absolutely no fault of their own, and he also knows the couple in question would never default on their rent & will know how lucky he is to have such good tenants.

              They also told me they moved into their Landlords property in the middle of the month, but their landlord still charged them a full months rent instead of two weeks rent, the Landlord said he did this because he had not requested the usual deposit from them. Talk about kicking a dog when it's down.
              moonface

              Comment


              • #8
                Most ASTs require T- separately from 'T must pay rent reserved by AST'- to pay all outgoings. Maybe it's upon that clause that L is relying here?
                JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                4. *- Contact info: click on my name (blue-highlight link).

                Comment


                • #9
                  Jeffrey - of course you have a valid point, but I still feel that to expect a short term AST holding tenant to pay a ground rent to a lessor, or a service charge for that matter is unwise as, should the tenant default, the landlord will have problems with his lessor. In this case we appear to have a fairly greedy landlord and some ultra co-operative tenants. Ultra co-operative tenants I may have as well, but I have never tried their patience! I expect them to pay their rent as specified in their AST and "all outgoings" means utilities, council tax and telly licence: that's all! I expect to be expected to pick up the rest, unless it is caused by tenant damage. I also like to sleep easy at night - maybe that is why I haven't had many voids for a long time!

                  P.P.
                  Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

                  Comment


                  • #10
                    I wholly agree that it's iniquitous (and unwise) for L to do it. However, we don't yet know the background details.
                    If I were advising T, I'd suggest that T contact the freehold reversioner (F)direct. Perhaps F can bring pressure to bear on L.
                    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                    4. *- Contact info: click on my name (blue-highlight link).

                    Comment


                    • #11
                      Thank you P.Pilcher/Jeffrey

                      I have just had it clarified by one of the affected pensioners, that their Landlord called to their door and actually took the £15 ground rent from them in cash, but would not give them the ground rent invoice because he said it was in his name. Apparently Landlord did not give them a receipt either.

                      They confirmed they drew the £15 out of their post office account, so sad.

                      I know who the freeholders are, and I know the name of their management company, the MC in question do not have a good reputation on this forum.

                      The 3 directors of the freehold company are the same 3 directors of their management company.
                      moonface

                      Comment


                      • #12
                        This is quite bizarre. I don't think 'outgoings' would normally be interpreted as including the ground rent. Otherwise LL's would also be entitled to charge their tenants for the iniquitous management fees they sometimes have to pay under their lease, and heaven knows what not.

                        Comment


                        • #13
                          The law never gets it absolutely right. Here we have the problem of the precise legal definition of the word "outgoings". Most of us know exactly what this means, but would a judge agree? Jeffrey has been rightly pedantic about it's precise meaning as a judge would have to be. The tenants therefore can look at a lease which requires them to be responsible for all outgoings. Based on what the general consensus of its meanting is, they could refuse to pay this ground rent - a trifling sum when considered what the landlord would have to expend to get a judge to make a ruling on the matter. Thus, our co-operative tenants have the choice of either paying the sum or attracting the rapid service of a section 21 notice. If they liked the property in which they were living, they might decide that the odd extra £15 was worth it!
                          This is possibly a case where the law is too much in the landlord's favour, however there are few of these compared with the advantages which "professional" tenants exploit all the time!

                          P.P.
                          Any information given in this post is based on my personal experience as a landlord, what I have learned from this and other boards and elsewhere. It is not to be relied on. Definitive advice is only available from a Solicitor or other appropriately qualified person.

                          Comment


                          • #14
                            I think that many commercial undertenants would be very surprised to be told that their obligation to pay rent and/or their obligation to pay all outgoings included an obligation to pay their immediate landlord's rent. The same principles must apply to commercial properties and to ASTs where the landlord pays a ground rent. Ground rent is an incident of the landlord's tenure and does not directly relate to the undertenant's use and occupation of the property. In the absence of an express obligation I can see no way an undertenant can be required to pay ground rent.

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