How should I demand ground rent?

by Readers Question

10:56 AM, 10th March 2016
About 3 years ago

How should I demand ground rent?

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How should I demand ground rent?

I would appreciate any help or advice on how I should demand ground rent.asking for money

I currently own the freehold for my 1st floor maisonette and the ground-floor maisonette which is owned by someone else. I am now entitled to demand ground rent from the owner of the ground-floor flat however I don’t know if there is a formal process for this.

Can I simply send the leaseholder an email requesting payment (based on insurance premium) or do I need to follow some legal or accounting procedure?

Also, I have been told that I can add a charge for my own admin time. Is there an industry standard value for this or simply what I think I am worth?

Thanks in advance.

Nilesh



Comments

Neil Patterson

10:58 AM, 10th March 2016
About 3 years ago

Hi Nilesh,

I am not an expert on this but the Leasehold Advisory Service can be very helpful 🙂 >> http://www.lease-advice.org/

Nick Pope

11:53 AM, 12th March 2016
About 3 years ago

In most circumstances there will be a ground rent, usually fixed in the lease. Usually a small amount (say £50) per annum sometimes increased on a fixed schedule such as, in a 99 year lease £25 for the first 33 years, £50 for the next 33 and £100 for the last 33.

You mention buildings insurance and this would be part of the maintenance arrangements which would also be in the lease. The landlord normally has the right to insure the whole premises, carry out repairs to the main structure, gutters, drains etc. and to charge a fixed percentage to the owner of the other property in the block. You can add an amount for admin but it would have to be reasonable so probably not over approx. 15% of the maintenance charges.

It is possible that if this is an older building maintenance is down to individual owners - often the ground floor maintains foundations etc. and the first floor owner the roof structure. In this case there would normally be terms in the lease to force repairs to be carried out but this is difficult if the other owner simply won't comply.

I suggest that you check the lease to ascertain these points before doing anything.

Don't let the other owner tell you that the ground rent has not been paid for years so he doesn't have to pay - it's still due though you probably can't demand any from before your ownership.


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