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Doubling Ground Rent : what can you do if stuck in the leasehold scandal.

23rd November 2019 by Lightbox Digital

You buy a house and find out that you don’t actually own the house.  Sounds a situation that would never happen, right? Wrong.

It is estimated that over 100,000 UK homebuyers are trapped in leasehold properties when they thought they were Freeholds.  To make matters worse, many of these leases have clauses containing onerous ground rent clauses which allowed spiraling ground rents. To make the problem even worse, there are many more people in leasehold flats with these doubling ground rent clauses.  In short, this will make the houses either almost massively reduced in value, or almost impossible to sell.

Doubling Ground Rent

Although there may be no available remedy against the home-builder or developer, you may be able to claim compensation from your conveyancing solicitors if they did not advise you as to the existences of these doubling ground rent clauses.  After all, you put your trust in these professionals to do the right thing and to advise you properly.  Therefore, if these experts have not provided you with the right advice, you should be able to seek some redress.

We have been looking this for nearly 2 years now and have identified thousands of leases which contains a ground rent clause which doubles every 5 or 10 years (there are cases where ground rent is doubling every 25 years), and – most importantly – where the Solicitors who were instructed to represent the buyers failed to properly identify or point out these clauses and the terrible consequences they could have on the property.

We are now representing over 1,000 individuals affected by this leasehold scandal and the doubling ground rent clauses and are talking to hundreds more who may have a potential claim against the Solicitors they were using at the time.

If you’ve been affected like this, there may be a potential claim to be brought against the Solicitors who you hired. We can discuss this with and give you advice for free, so feel free to contact our leasehold law experts and see if we can deal with your claim on a No Win, No Fee basis.

Call us on 01384889900 today to talk more about your right to financial compensation.  Or join in the Facebook conversation in the Leasehold Action Group.

The Doubling Ground Rent, Leasehold Scandal, and Ground Rent Scandal

Unlike a freehold property, a leasehold property (effectively) is not yours to own for the rest of your life.  You may have paid a lot of money to buy the house but regardless of this, if it’s a leasehold home or flat, you are basically renting it for the period of the lease in place.

This means that when the lease ends, the house would no longer be yours – as it is the property of the freeholder, it would be returned to them.  As you may already know, the lease period can actually vary from anywhere between 99 years to 999 years.  What makes things potentially even worse is that this lease will almost certainly contain some sort of clause that demands the payment of annual ground rent.  These ground rents are usually around £250-£500 a year, and it’s not uncommon for this to double in price every ten years.

What is the government doing about the leasehold scandal?

The Spectator asks whether the Conservatives will deliver a ban on leaseholds, and there are other calls to do the same, but not much will be done to help those already locked into leaseholds.  And even if they do, it won’t be for some time whilst Brexit is on the anvil. Read more here.

Leasehold vs Freehold – what’s the difference?

There are two fundamentally different forms of legal ownership: freehold and leasehold. Although estate agents tend to gloss over it, the difference can be between a home that is worth buying and one that isn’t. Many people who don’t sort this out when they buy a home end up regretting it – getting it wrong can be hugely expensive.  The HomeOwners Alliance will tell you more here.

Can You Buy the Freehold?

You’re entitled to buy the freehold after you’ve owned the property for two years, and there’s a calculation which is utilised in working out how much it may cost you. But this will begin by looking at the annual ground rent and terms of years over which it would be paid.

This can be very expensive and freeholders will use a number of tactics and arguments to ensure they receive the maximum price possible. The issue is that these onerous rent clauses may well impact on the value of the property and, in some instances, make the property unsellable.

LeaseClaims is a working alliance consisting of FS Legal; in partnership with New South Law and Nelsons. We are working collaboratively to secure compensation for the victims of the Leasehold Scandal, who are unable to sell their properties as a result of negligently-sold leasehold contracts.

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FS Legal LLP, registered office, 1 Hagley Court South, The Waterfront, Brierley Hill, West Midlands DY5 1XE (OC366452) is authorised and regulated by the Solicitors Regulation Authority under number 565776.
New South Law Ltd, registered office, Suite 3a, Anchor Springs, Duke Street, Littlehampton, BN17 6BP (10725076) is authorised and regulated by the Solicitors Regulation Authority under number 645781.
Nelsons Solicitors Limited, registered office, Pennine House, 8 Stanford Street, Nottingham NG1 7BQ (07219010) is authorised and regulated by the Solicitors Regulation Authority under number 536939