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.

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.

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.

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.

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.

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