Lease extension- 65yrs. unexpired, £20 ground rent

[andrewtenant]

Hello

I've reviewed many of the other posts on this site and haven't seen the scenario that my landlord has proposed to me and I wonder if any contributors could advise if they believe it is fair.

I own a flat in a block of 6 pupose built ones and have 65 years remaining on my 99 yr lease. I pay £20 per year ground rent. In response to my request to extend my lease my landlord has responded with a variety of options.

I could extend the lease with a peppercorn rent, and pay an amount which I believe is around twice as expensive as my calculations suggest it should be (which I have in hand to deal with but it will still be expensive!).

Alternatively I could extend the lease and increase the ground rent payments. The choices of increases go up in steps of £50 to nearly £250 per year with a resulting reduction in the cost for the extension. At £250 ground rent the cost of the extension is nearer to the figure I believe is fair for the extension.

My question is should I accept an increase in the ground rent when extending when the norm seems to be a peppercorn rent? Significant increases in the groung rent could influence saleability in the future. What are contributors thoughts?

Thank you.

[laracroft]

My landlord offered me a very similar set of options when i first wrote to ask about extending the lease. you are entitled (assuming you fulfil the conditions - which you probably do) to a 90 year extension at a peppercorn rent. If he is proposing twice your calculation, and you have calculated correctly, then I think your best bet is to serve a tenants notice and force the issue at a value which your and his surveyors will negotiate. You'll be liable for his reasonable legal and valuers fees, but you won't pay over the odds for the extension.

Alternatively you can try and negotiate a lower figure between his high and your calculation, but this is the route that I took, and after 14 months of swapping letters with figures my landlord backed out of his written agreement, leaving me right back where i'd started.

I too was reluctant to increase the ground rent as saleability concerned me, but I am not sure how much this affects prospective buyers - maybe someone else can provide their opinion.

[sgclacy]

Hello

I've reviewed many of the other posts on this site and haven't seen the scenario that my landlord has proposed to me and I wonder if any contributors could advise if they believe it is fair.

I own a flat in a block of 6 pupose built ones and have 65 years remaining on my 99 yr lease. I pay £20 per year ground rent. In response to my request to extend my lease my landlord has responded with a variety of options.

I could extend the lease with a peppercorn rent, and pay an amount which I believe is around twice as expensive as my calculations suggest it should be (which I have in hand to deal with but it will still be expensive!).

Alternatively I could extend the lease and increase the ground rent payments. The choices of increases go up in steps of £50 to nearly £250 per year with a resulting reduction in the cost for the extension. At £250 ground rent the cost of the extension is nearer to the figure I believe is fair for the extension.

My question is should I accept an increase in the ground rent when extending when the norm seems to be a peppercorn rent? Significant increases in the groung rent could influence saleability in the future. What are contributors thoughts?

Thank you.

It is difficult to comment without the facts. The sort of information you need to give is:-

1) Current vale of the flat if it had a long lease
2)Pemium proposed by the landlord with a peppercorn rent and
3) premium proposed with a reduced premium


If you are thinking of selling it may be in your interest to pay a lower premium and have a higher ground rent if you are confident that it will not effect its value. A very rough guide is that ground rent should be no higher than 1/10 of 1% of the value of the property

[tenant29]

I believe a flat with NO annual ground rent to pay will always attract a higher selling price compared to a similar flat with annual ground rent payments.