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Sep, 2014

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  1. #1

    Default Landlord Freeholder askingfor ground rent and buildings insurance after 7 years

    Hi
    Building is 3 storey building with shop on ground floor, first floor 1 bed flat and 2-3 floor 3 bed flat. I own the 3 bed flat on the 2-3 floor.
    The freeholder to our building has contacted me after 7 years during which he never asked for any ground rent or buildings insurance. Now out of the blue he has sent me a notice of a summary of charges outstanding for the ground rent and buildings insurance he states has accumulated over the past 7 years. He has offered no receipts to provide proof of the cost of buildings insurance taken out or the means by which he reached the calculation of the ground rent amount. The total amount comes to over £7K. Is he allowed to out of the blue after 7 years of no contact whatsoever and demand this payment or should he have done this annually as one would expect. What is my position legally? I am currently obtaining a copy of the lease which I will examine in detail also before making my response to him. Any advice on this matter would be appreciated.

  2. #2
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    He can claim ground rent for the 6 years assuming he has sent a demand complying with S166 of CALRA 2002 > http://www.legislation.gov.uk/ukpga/2002/15/section/166

    As for insurance this would be a service charge and he is limited to recovering expenditure from the last 18 months only as per S20B(1) LTA 1985 > http://www.legislation.gov.uk/ukpga/1985/70 (*unless has has sent previous notice of costs incurred which as per S20B(2) - but it doesnt sound like it). This demand would also have to comply with lease and relevant law (most importantly contain LL's name & address and the 'Summary of Rights').

    So by the sound of it you may be liable for 6 years of ground rent and last years (or maybe year and half) of insurance.

    *The lease may say that insurance is payable as rent, perhaps someone else can advise if this makes a difference.

    Andy

  3. #3

    Default Landlord Freeholder askingfor ground rent and buildings insurance after 7 years

    Thanks Andy your reply is much appreciated. I'll check with the lease when I get a copy in next couple of days and I'll report back on the details of the wording, clauses etc regarding ground rent. He's asking for ground rent of £430 per year for the last 7 years. Is that not excessive? also how does the £430 figure arise. Is it explicitly stated in the lease (i doubt this) or is it based on a formula? By the way the freeholder since I bought this flat has never shown his face. No maintenance etc by him for the past 7 years of the common areas etc. In fact we (my brother owns the flat below) have been maintaining the common areas i.e. cleaning the hallway and stairs etc.

  4. #4
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    The starting annual ground rent is written into the lease and in many leases the rent doubles up after 25 or 33 years.

    If your lease falls to 82 years , you need to consider applying for statutory 90 years lease extension as the cost increases on leases below 80 years due to inclusion of 50% marriage value.

  5. #5
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    The amount of ground rent will be in the lease, sometimes a flat amount (mine is simply £30) or as mentioned above, sometimes formulas to increase it, it should all be in the lease...ignore anything that says its payable without notice, etc..this is all overidden by provisions of S166.

    Again, the lease is needed to see what it says about maintanence ?, have you been billed for any or just insurance ?. ..the lease may oblige the FH to do various repairs, maintanence, etc..if he hasnt done so it is possible to sue him for damages (although this can be complex) but is certainly worth keeping in mind as a counterclaim/set off should he start legal action against you.

    It may well be that he should of been mainatining the common area all this time, although strictly speaking in law, its not neccassary to inform him if he is not fulfilling his obligations reagrding common areas it is a good idea to give him notice (i.e the lease says he must clean/tidy but he has not thus breaching lease clause x).

    BUT all the above will need verifying when you have the lease in your hands.

    Also has your FH recently been sold ?. I wonder why the sudden interest after 7 years, if it was sold you should of been given right of first refusal.

    Andy

  6. #6
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    You may not be entitle to right of first refusal as the ground floor is a commercial unit.

  7. #7

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    Hi Andy
    The only thing he has billed me for so far is the ground rent and buildings insurance. I'll bear the above information in mind you have supplied. Thanks again for your detailed responses. I'll update as soon as the lease copies are with me for the two flats which should hopefully be in the next two days.

    regards
    Higgs

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