0:01 AM, 24th May 2023, About 9 months ago 6
Hello, As a reasonably large portfolio landlord, we had been caught out by the ‘Doubling Ground Rent’ clause in numerous leases for a multitude of apartments. These clauses make the property un-mortgageable in many cases, and the Competitions and Markets Authority (CMA) recognises these clauses as punitive and unfair.
Many superior landlords undertook a pledge to vary many of the doubling ground rent clauses in these leases to RPI linked increases (much more palatable for lenders) in response to pressure from the CMA.
We initially received plenty of offers from superior landlords offering to enter into a Deed of Variation linked to RPI. They offered to forego their costs, and to pay up to £750 towards our solicitor’s fees. These ‘deals’ were often only for owner occupiers, however.
The ‘offers’ or ‘deals’ we are being presented with now are for NO contribution to our solicitor’s fees and up to £7,000 per apartment for the landlord’s ‘costs’ PLUS disbursements.
When we have asked for a bulk discount, we have been offered a buy 5, get 1 free scenario. £35,000!
When investigating these landlords, a little further, we have often seen that ‘Penult 101’ or ‘Adriatic Land 2’ (for example) have undertaken to vary all leases containing doubling ground rent clauses at no cost to owners. This seems to be the case when these Landlords have purchased the ground rent from the likes of ‘Taylor Wimpey’ or ‘Countryside’ but are unwilling to do the same across the board, only when either the CMA or the seller (Taylor Wimpey for example) have pressurised or compensated them for agreeing to the Ground Rent purchased from them.
Also, we often find that our landlords are Penult 102, Penult 103, Adriatic Land 3 or Adriatic Land 8 etc (as opposed to Penult 101 and Adriatic Land 2). who have given NO such undertaking. The full list can be found here https://www.gov.uk/cma-cases/leasehold#undertakings-accepted-from-15-more-freeholders.
Has anyone else experienced this?
And, more importantly, have they had any success negotiating with their landlord on reasonable terms?
We can only go via their agents (Homeground is the most common) and find them immovable.