Unpaid ground rent question.

[W124Bob]

When we moved to our current house back in '93 there was a peppercorn ground rent collected by a neighbour, it was a less then £10 a year. This hasn't been collected for over 20 years now, a least 2 remortgages have been done and it never came up as an issue. We are currently doing a small remortgage and the solicitor has raised this issue via an email sent late yesterday, with a comment about an indemnity policy may be required. My question is could the unpaid rent be collected at some point, there has never been any correspondence sent to this house . I may be able to see the neighbour as he is still in the area, but not at the old address.

[unident]

Yes.

Even at £10 per year you’re looking at the vast sum of £270. An indemnity policy isn’t required, just pay up the balance, or sign an agreement to if it’s ever requested. Solicitors love to have indemnity polices in place for everything now for some reason.

One of my first homes had an annual ground rent of £2.10 which was never collected in the 7 years I owned the property, or had it been collected from the multiple previous owners for the past 30 years. When I moved in the previous owner knocked £8.40 (4 years ownership) off the purchase price, which is what each owner did on sale. It cost me £14.70 off the sale price when I moved on. I guess the solicitor would want a £20 indemnity policy in place instead now though

[scottyp123]

TL:DR = ground rent is only payable after you have received a properly worded official form or demand.

I had problems with paying my ground rent a few years ago, The company sent me a request and I paid it when I first moved in then got a letter about the GR being sold on to a different company, I didn't take note of who the new firm was and after all the letter could have been a scam or whatever.

Fast forward 5 years or so and it dawned on me that I hadn't paid any ground rent, I had never received any sort of invoice or demand or anything like that and I had absolutely no idea who the new company was I was supposed to be paying, nor could I remember the old company name either.

the end of that particular year I got a demand for 5 years worth of payments from the new company along with about £800 in supposed debt collectors fees, firstly I told them to fk right off but after a bit of digging I found out that ground rent is only payable if you have received a properly formatted demand that is laid out in legislation. Because I had only ever received a dodgy badly printed threatogram was null and void, I told them I would pay the outstanding GR as a gesture of good will but my initial offer of fk off stood as far as any debt collecting fees go. Think my new freeholder is just a husband and wife team working out of their boxroom that buy up leases and try to frighten tenants into paying exorbitant fees, hope they get a visit one day.
.

https://www.lease-advice.org/faq/my-landlord-has-n...

PS Never buy a house that is freehold unless the wife threatens to divorce or kill you if you don't buy her her dram house. And then buy the freehold as soon as possible for fks sake.

[mick987]

scottyp123 said:

TL:DR = ground rent is only payable after you have received a properly worded official form or demand.

I had problems with paying my ground rent a few years ago, The company sent me a request and I paid it when I first moved in then got a letter about the GR being sold on to a different company, I didn't take note of who the new firm was and after all the letter could have been a scam or whatever.

Fast forward 5 years or so and it dawned on me that I hadn't paid any ground rent, I had never received any sort of invoice or demand or anything like that and I had absolutely no idea who the new company was I was supposed to be paying, nor could I remember the old company name either.

the end of that particular year I got a demand for 5 years worth of payments from the new company along with about £800 in supposed debt collectors fees, firstly I told them to fk right off but after a bit of digging I found out that ground rent is only payable if you have received a properly formatted demand that is laid out in legislation. Because I had only ever received a dodgy badly printed threatogram was null and void, I told them I would pay the outstanding GR as a gesture of good will but my initial offer of fk off stood as far as any debt collecting fees go. Think my new freeholder is just a husband and wife team working out of their boxroom that buy up leases and try to frighten tenants into paying exorbitant fees, hope they get a visit one day.
.

https://www.lease-advice.org/faq/my-landlord-has-n...

PS Never buy a house that is "freehold" unless the wife threatens to divorce or kill you if you don't buy her her dram house. And then buy the freehold as soon as possible for fks sake.

Do you mean never buy a house that is leasehold?

[scottyp123]

Yes, got it backwards.

[RichardDastardly]

I’m 99% certain that unpaid ground rent arrears are limited by statute to 6 years. In which case the max risk to the bank from the unpaid ground rent is 6 times the annual amount and no indemnity policy is needed. As has been suggested earlier in this thread, solicitors (and banks) can have a tendency to box tick in a moronic way and title insurance companies do very well out of this. OP, I suggest you raise the 6 year limitation period with the lawyer and (if they are too embarrassed to change their position) the bank.

If the lease contains an “any breach” forfeiture clause as well as a ground rent, then that would be something a bit more substantial and the bank might more legitimately require title insurance (but they would still be being a bit risk averse).

[Electro1980]

Talk to a specialist solicitor. You may well now have a right to claim ownership of the as Adverse possession under common law. It has been a long time since I dealt with this, but when I worked as a credit controller for the council we used to put a lot of work in to making sure peppercorn rents buildings, some of which had 999 year leases and tiny rents, had a clear audit trail of being chased, if not paid, so there was no risk of a claim of adverse possession.

https://en.m.wikipedia.org/wiki/Adverse_possession

[Simon_GH]

The 6 year rule is correct. I got fined for not submitting my insurance details to our ground landlord. They didn't ask for it with the ground rent but it was 'hidden' in the leasehold agreement. They fined me £50 / year but could only go back 6 years. This was the day before we were due to exchange contracts so I paid up and investigated later. I decided it wasn't worth the trouble to pursue.

[jamei303]

This sounds more like a rentcharge, which is a very different thing and must be paid:

https://www.todaysconveyancer.co.uk/main-news/bewa...

[Pinkie15]

scottyp123 said:

PS Never buy a house that is freehold unless the wife threatens to divorce or kill you if you don't buy her her dram house. And then buy the freehold as soon as possible for fks sake.

What if her 'dram' [sic] house is Regents Park Inner Circle?

Don't think Crown Estates will let you buy the freehold.

[Mave]

jamei303 said:

This sounds more like a rentcharge, which is a very different thing and must be paid:

https://www.todaysconveyancer.co.uk/main-news/bewa...

Rentcharge, that's the phrase I was looking for, quite different to ground rent. There was a high profile case a few years ago, it never came up when we bought our house, but it came up when we remortgaged a few months ago. We ended up getting an indemnity policy during the remortgage.

[jamei303]

In the 1980s I grew up in a Victorian terrace which was the family home. My father would receive a handwritten letter every year from a solicitor who was the great-great-great-grandson of the developer, asking for payment of the 5 shillings rentcharge which was levied on each pair of properties in the terrace, with the left-hand one responsible for paying. Dad would go next door to ask for their share of the 25 new pence. Apparently he could have bought it out permanently for about twenty quid, but he said he thought that was unreasonable.

[hyphen]

jamei303 said:

In the 1980s I grew up in a Victorian terrace which was the family home. My father would receive a handwritten letter every year from a solicitor who was the great-great-great-grandson of the developer, asking for payment of the 5 shillings rentcharge which was levied on each pair of properties in the terrace, with the left-hand one responsible for paying. Dad would go next door to ask for their share of the 25 new pence. Apparently he could have bought it out permanently for about twenty quid, but he said he thought that was unreasonable.

love it