The occurrence of the notorious ground rent scandal has resulted in creating problems for homeowners. The root of these issues generally focuses on the connection of the ground rent with leasehold properties. It is no wonder that formerly the houses were sold or purchased under freehold titles, which enabled the property owner to acquire the land captured by the house. However, with the evolutions made in the real estate industry, the houses are now sold under leasehold tiles.
It signifies that a developer is no longer obliged to follow the freehold title, and it is more likely to ask the homeowners to pay ground rent to the developer. It means that a house owner is required to oblige to the restrictions implemented by the developer, and it should ask for the developer’s permission to be able to make any changes to the property. Also, it means that if a homeowner starts to ask for permission, it might require them to pay exorbitant administration fees for the process.
Speaking from a conventional point of view, a majority of the ground rents were below £100, and the amount would go up periodically. For instance, if a homeowner has consented to a decade long lease then; the initial ground rent would be estimated at £100 on an annual basis. Also, the amount would escalate to £125 after a span of 25 years then; it would increase up to £150 once it has completed 50 years.
However, a majority of the developers have debunked the traditional approach to ground rent, and they have introduced new approaches to cope with these increases—which is more likely to double in every 10 years. It requires a homeowner to pay the ground rent accordingly.
Also, if you are on the move to invest in a leasehold house, one should always confirm the previous ground rent scandal provisions of the house. Alternatively, you can also reach out to your solicitor to confirm the status of the ground rent associated with a property. Your solicitor should claim complete responsibility to ensure that the former provisions would not tamper with the market value or appraisal value of your house in the long term, and it should allow you to sell the house in the future.