If there is absolutely one thing you must pay every year it is the ground rent that you undertook to pay when you signed the lease with legal advice.
This is what the taxpayer-funded Leasehold Advisory Service has to say:
“Ground rent is a payment you make to your landlord as a condition of the lease. As with any rent, if you must pay ground rent this will be stated in your lease and you should pay it by the due date. Although it is your responsibility to pay the ground rent, the landlord must give you notice of it beforehand using a form prescribed by the Landlord and Tenant (Notice of Rent)(England) Regulations 2004 and the Landlord and Tenant (Notice of Rent)(Wales) Regulations 2005 (see the link below). Landlords cannot legally recover ground rent unless they have asked for it first.”
LKP’s advice is ALWAYS pay the ground rent. Tribunals have accepted breezy assurances by freeholders that the ground rent demands have been sent out. They have been unsympathetic to leaseholders claiming it never arrived.
We are aware of leaseholders who have not been sent ground rent demands, or they have been sent to the wrong address. Quite deliberately in some cases, according to persuasive testimony. Pitching a leaseholder into ground rent arrears is very advantageous for aggressive freeholders. Before you can say JB Leitch, the debt has doubled.
What often happens is that leaseholders then try to pay off the ground rent without paying off the high legal fees that accompany the demand.
This is not acceptable to the debt collector, who is usually remunerated only on recovery of the debt from the fees he himself has dreamed up. So, the payment is refused; the meter keeps clocking on; and forfeiture in the tribunal looms.
Here is a Chinese woman whose £2,000 debt for missing her ground rent recovery costs were halved after the intervention of LKP:
The reason why both government and opposition are committed to reform the leasehold system is because of system abuses of ground rent. These are at such onerous levels that LKP believes around 100,000 properties are unsellable because of them. Around 12,000 have absolutely ten-year doubling ground rent terms, often applied to leasehold houses which buyers bought aided by taxpayers through Help To Buy and which should have been freehold sales in the first place.
Our plc house builders seem determined to create investment assets for someone else in the homes they sell their customers.
Notice of ground rent
You are not liable to pay the ground rent unless your landlord has asked for it using the prescribed notice of demand form. (Well, yes, but see above.)
The notice must state:
- the amount of the ground rent due; and
- the date on which you must pay the ground rent or, if the demand is sent after the due date, the date when it would have been due under the terms of the lease.
- The date the payment is due must not be either less than 30 days or more than 60 days after the date the notice is served, or before it is meant to be paid in line with the lease. The landlord can send the notice by post to the address of the house or flat it relates to, unless you have already given the landlord a different address.
The notice of demand must also include:
- your name;the period covered by the demand;
- the name and address of the person or company the payment should be made to;
- the name and address of the landlord (or agent if this applies) who is giving the notice; and
certain supporting information (included as notes to the notice).
The Leasehold Advisory Service again:
“Your landlord cannot begin any legal steps for recovering the rent, including action for forfeiture (the landlord’s right to end the lease and re-enter their property if you break the terms of the lease) and possession, unless they have already served the notice of demand (in the correct format) and given you the correct period of notice, and you have failed to respond.”