If you have purchased a leasehold property, there is a risk that your lease may contain unusual and onerous ground rent terms.

Some ground rent clauses can see payments rise dramatically over time, potentially reaching thousands of pounds a year.

Clauses where ground rent doubles every ten years, commonly used by developers like Taylor Wimpey to boost profits can be particularly problematic, as they can make it difficult to sell, reduce property value, and prevent remortgaging.

While the government is planning reforms, many leaseholders are still affected. If your solicitor didn’t advise you properly, you may have grounds for compensation.

What can I do about rising ground rent on my leasehold property?

If your ground rent doubles every ten years and your solicitor didn’t warn you, you may be able to claim compensation for professional negligence.

You could also negotiate a deed of variation, and some developers like Taylor Wimpey offer schemes to switch to an RPI-linked rent, which may make lease extensions or freehold purchases more affordable.

What is ground rent?

Owning a leasehold property means you don’t own the land and must pay ground rent to the freeholder, as set out in your lease.

What is an onerous ground rent clause?

An onerous ground rent clause is one in which the ground rent levied on a property rapidly increases over the years at above the rate of inflation.

Typically, it will double every ten or fifteen years, although some of the most extreme examples are linked to ‘rentable value’ or a percentage of the sale price of the property.

Can I sell my home if I have an onerous ground rent clause?

Selling a home with an onerous ground rent clause can be challenging, as potential buyers may be deterred by the escalating costs, and mortgage lenders may refuse to finance such properties.

In some cases, flats with these clauses sell at auction for significantly less than their original price, so it’s important to seek professional advice promptly to explore your options.

Contact us, and a member of our team will be in touch to discuss how we may be able to help you with issues related to ground rent.

Your Key Contacts

Graham Balchin

T: 020 7406 1000

E: GrahamBalchin@cartercamerons.com

Graham is a consultant solicitor in the litigation team and has specialised in professional negligence claims for over 20 years. He trained at Trowers & Hamlins, qualifying in 1992.

His recent successful cases include over 30 professional negligence claims arising out of an elaborate mortgage fraud, recovering over £5million on behalf of borrower/purchaser clients who have been defrauded into buying substantially overvalued “buy to let” properties.

He has also acted for a group of investors who had purchased properties ‘off plan’ in the Philippines that were either not built or were sold twice. In this case the investors brought successful claims against the negligent solicitors who failed to ensure that the purchase contracts were backed with the promised performance bonds that should have protected the buyers from default by the developer.

He has also acted in various other professional negligence matters, relating to solicitors, barristers, valuers/surveyors, accountants, financial advisors, banks and insurance brokers.

Graham takes pride in providing clear, concise and practical advice and is regularly contacted to offer expert comment on media reports relating to professional negligence and property.

He is on the register maintained by the London Solicitors Litigation Association of solicitors with experience of supervising and executing civil search orders.

Transactions:

Reported cases and cases of interest include:

  • Laib v Aravindan [2003] EWHC 2521 QBD, The Times [13/11/2003] – Claim against solicitors for loss of chance to pursue a negligence claim against a mortgage lender involving complex issues relating to limitation.
  • Vinayak v Lovegrove & Eliot [2007] EWHC 9009 – Claim against solicitors arising out of failure to advise that break clauses in leases could only be exercised by original lessee. Court held that losing solicitors could not compel disclosure of conditional fee arrangement.
  • Tavistock Repertory Guarantors Ltd v Gregory Rowcliffe Milners HQ02X2325 – Claim against solicitors who lost client the right to renew lease of theatre premises resulting in agreed damages of £2,020,000. This is believed to be possibly the highest sum ever recovered from a solicitor who has acted “pro bono.”
  • Ayton v RSM Bentley Jennison [2014] QBD Lawtel – Held defendant in fraud and negligence claim not entitled to rely on defence of tender before claim (action), which is a defence still only available in liquidated claims.

Memberships:

Professional Negligence Lawyers Association

Leisure:

Shooting, badminton, skiing and motorcycling.