McCarthy & Stone retirement flat- rent suddenly increased

[spursliz]

Can anyone help with a problem that I have? My mother (89) lives in a McCarthy & Stone "sheltered" flat run by a firm called Peverel Management. Their service is apalling. I believe the business was sold last year and they are now squeezing every last cent out of the owners. In November 2007 they sent out a letter saying that at the next review in 2008, they would be increasing the ground rent. My mother has the smallest flat there, and she was very concerned when she received a letter saying it had gone up from £200 pa to £454, and that she owed them £127, payable immediately. This is outrageous. Is it really possible to put the ground rent up by so much. Also, I thought at £200 pa for 3 rooms it was too high. Is there somewhere I can appeal on her behalf? Thank you in advance. Liz

[Corinne Tuplin]

Hi there,

Assuming that your mother has a long lease (i.e. over 21 years), the ground rent phases should be contained in her lease or later deed of variation for the property. In a 99 year lease, for example, it is usual to have 3 ground rent phases although this is not always the case.

I would suggest reviewing the lease/any deed of variation to check whether the ground rent increase is legitimate or not.

If your mother is also unhappy about current management, it may be an idea to look into Right to Manage: http://www.proleagle.com/righttomanage.htm

I hope this assists.

Kind regards,

CORINNE TUPLIN
SOLICITOR
PRO-LEAGLE
www.proleagle.com

[jeffrey]

Can anyone help with a problem that I have? My mother (89) lives in a McCarthy & Stone "sheltered" flat run by a firm called Peverel Management. Their service is apalling. I believe the business was sold last year and they are now squeezing every last cent out of the owners. In November 2007 they sent out a letter saying that at the next review in 2008, they would be increasing the ground rent. My mother has the smallest flat there, and she was very concerned when she received a letter saying it had gone up from £200 pa to £454, and that she owed them £127, payable immediately. This is outrageous. Is it really possible to put the ground rent up by so much. Also, I thought at £200 pa for 3 rooms it was too high. Is there somewhere I can appeal on her behalf? Thank you in advance. Liz
Corine is of course correct, but did your mother not understand the Lease before committing herself? The solicitor who acted for your mother should certainly have explained about the rent escalator clause.

[spursliz]

Wow, thank you both very much for your quick responses. I shall have to visit my mother, who is 3 hours drive away, and get a copy of her lease. I know we considered extending it but she has at least 70 years left on it. I am going to look into the service charges, too, thank you Corinne for your link, as they are very high. The possibility of running it themselves is not to be considered; they moved into sheltered accommodation to get rid of all those worries, ironically. The constant cry of the managing company when anyone raises an issue is "If you don't like it, find someone else!" which makes me angry; compassion and kindness - nil.

Your kindness is greatly appreciated; fingers crossed!

[jeffrey]

If your mother is also unhappy about current management, it may be an idea to look into Right to Manage.
For a retirement block of flats, not a very practical idea.

[Richard Webster]

My mother had a McCarthy & Stone flat and the ground rent has just gone up form £225 to £554! There is a review clause based on changes in the Retail Prices Index in the lease.

[Valman]

Liz

The only legal way a ground rent can increase is via the terms of the lease. I agree with one of the replies that it is probably an increase linked to the RPI or, as I suspect in your Mum's case, a percentage of the current market value of the flat. Often. M & S and Peverel increase the rent every 21 years and use super inflated flat values. The lease will include an appeal mechanism.

If she exercises her right to extend the lease under the Leasehold Reform, Housing and Urban Development Act 1993, she will increase the lease by an additional nonety years with no ground rent payable. She will need to pay the ground rent as a capitalised sum (a much reduced sum reflecting the early payment of all the ground rent to the landlord now) but will not be required to pay for all the future increases.

I have found a website called www.extendthelease.com that calculates the premium payable for a lease extension and breaks down all the costs, including the capitalised ground rent. I doesn't appear to be linked to any company and looks like an inpendent website. Might be worth taking a look so that you can save your Mum some money and make the flat more saleable!

Val

I hope this helps.

[Fancyfree50]

Free calculator and info at www.lease-advice.org.uk

Their free phone advisory service is very helpful.