Does re-valuing risk wasting money?

Does re-valuing risk wasting money?

0:02 AM, 30th August 2023, About 8 months ago 5

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Hello, Our block of flats is owned by the leaseholders, except one which has a long lease pre-dating self-enfranchisement. According to this lease, ground rent should be reviewed every 21 years, which falls in December.

This requires an expensive valuation of the whole block.

Given the recent change in law, and government’s apparent intention to scrap ground rents entirely, would it be more sensible to ignore this provision?

Thank you,

Richard


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Comments

Judith Wordsworth

11:12 AM, 30th August 2023, About 8 months ago

As all the other flats are joint freeholders, and presumably pay no ground rent, I wouldn’t think it necessary to revalue and keep this sole ground rent paying flat at the same payment as is now.

When you do a rebuilding valuation for insurance purposes could get the surveyor to give a current building value then, which they should do anyway

Martin Hicks

12:57 PM, 30th August 2023, About 8 months ago

How long has the sole remaining lease to run? At it's expiry, the flat could be offered as share of freehold. If lease renewal/ extension is sought before then, why not offer freehold, with the price paid in instalments in lieu of ground rent.

Graham Bowcock

14:03 PM, 30th August 2023, About 8 months ago

You cannot unilaterally disregard lease provisions.

Without seeing the actual lease, I wonder why the whole building needs to be revalued and not just the flat that wants reviewing.

I don't think that ground rents in exisiting leases are to be scrapped, as far as I've read it's only in new leases.

Graham Bowcock

14:06 PM, 30th August 2023, About 8 months ago

Reply to the comment left by Judith Wordsworth at 30/08/2023 - 11:12
Comment by a valuer - there's no connection between a reinstatement valuation and a capital valuation. My firm doesn't do reinstatement valuations, we outsource them to a firm that doesn't do capital valuations. Any valuer doing both would want to be paid for both of them due to two lots of liability.

Alison Stone

11:15 AM, 31st August 2023, About 8 months ago

As a valuer of ground rents those that relate to the entire building we usually just do to the flat value, when only looking at one flat, as we assume the flat has the same ratio value as to the building but it really does depend on the exact wording of the lease.

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