QUESTION
I am in the process of applying for a lease extension. The lease I have was the one I was given when I purchased the property in 2005.
The head lessee wrote to me last week informing me that the lease was altered in 1998 and informing me that the ground rent was increased from £25 to £125 and enclosing a bill for £700. The letter states that this alteration took place 'amongst other things' but is not specific about what these things are.
The same head lessee has been sending me bills for £25 annually since 2005.
I have been advised to pay this as the application for a lease extension will not be granted unless it is paid.
I do not have a copy of the lease that was altered in 1998, just an older lease that was given to me by my solicitor when the property was purchased which shows years remaking to be around 60.
I have written to the head lessee and asked for a copy of the 1998 lease with so far no response.
The Land Registry confirm that the ground rent was increased in 1998. My present solicitor has not provided me with any further information about this 1998 lease.
My question is, if the lease was altered in 1998 is it likely that it was extended at that time? If so, that should either render my application for a lease extension unnecessary, or should affect the negotiations for a fair price for the lease extension.
I would be very grateful for your advice.
ANSWER
First, if your lease was ‘altered’ in 1998, then you could reasonably expect to have been advised on this at the time of your 2005 purchase, by your solicitor and you should have been told about any deed of variation or other document that is registered against your title.
In any event, ground rent is not due unless it is demanded properly, in the prescribed form and a landlord cannot demand ground rent that ought to have been demanded more than six years ago. Therefore, your maximum exposure is 6 x £125, if your ground rent is £125 per annum and if has been demanded properly. Often, I advise leaseholders on ground rent demands, many of which a void for non-compliance.
It does not follow that if your lease was varied in 1998 that it was extended at that time but if there is a 1998 lease, it ought to be available at HM Land Registry. Assuming all the criteria are met, you will have a statutory right to extend your lease for a period of 90 years and the new lease will have a peppercorn ground rent and the premium will be determined by a surveyor but you seem unsure about the term of your lease and you should resolve this immediately because if your lease has less than 80 years on it, the premium for your lease extension will be higher.
Shmuli Simon LLB (Hons), MIRPM, AssocRICS, Director of Legal Services at Integrity Property Management
