Claims About Ground Rent Review Clauses

What are ground rent claims?

Ground rent claims can be brought by owners of leasehold properties, where conveyancing solicitors have failed to advise about the consequences of excessive increases to ground rent. Ground rent claims are a type of professional negligence claim, and have become more common as a result of the ground scandal which has been uncovered recently by national newspapers. 

If you own a leasehold property, there is probably a clause in the lease saying you must pay an annual ground rent. This is generally to cover the cost of maintaining communal areas, and historically has always been fairly low, usually around £250 per year. In recent years, property developers have seen an opportunity to sell freeholds to investors, who require a return on their investment that is higher than £250 per year. This has led to the inclusion of onerous ground rent increase clauses in leases.

Under these clauses, ground rents which started at £250 per year, typically double every 10 years, until they reach £8,000 a year. Owners of properties with these onerous clauses in their lease are finding that their property is difficult to sell, as mortgage companies are reluctant to lend to buyers in these circumstances. This negatively affects the value of the leasehold property.

What can you do if you are affected?

The good news is, that you may have a claim against your conveyancing solicitor, who acted for you when you purchaed the leasehold property. Conveyancing solicitors ought to have flagged up the onerous ground rent clauses, and should have advised buyers about the potential consequences of owning a property where ground rent doubles every ten years.

Most conveyancing solicitors do not seem to have provided this advice to their clients, and the failure to do so is a type of professional negligence. In these circumstances, the buyer would be able to bring a claim against their conveyancing solicitor for the losses they have suffered. 

What about costs?

If your claim is strong, then it is possible that we would be able to act for you under the terms of a conditional (no win no fee) agreement. There are also a range of flexible funding options that we have developed for clients, to help with legal fees, including deferred fee options, and regular monthly direct debits.

If you are successful in your claim, your previous solicitor will have insurance and should therefore also be in a position to reimburse you for the majority of your legal fees, in most cases. 

What should you do next?

If you own a leasehold property, and would like to investigate whether you have a potential claim, we can assist. Samuels Solicitors is based in Devon, and we work for clients all over the country. We have decades of experience in bringing claims for negligence against solicitors.

The first thing we will do is contact your conveyancing solicitors to obtain your file and once that has been received, we will be able to advise you very quickly whether you have a claim. 

If you think you may have a claim, or if you would like us to investigate further for you, contact us for a free no obligation discussion about how we can help.