The scandal surrounding leasehold ground rents

Jennie Applebee  03-03-2017

There has been recent publicity about an unscrupulous practice by some builders selling properties on long leases with unfair ground rent clauses.

Instead of the ground rent increasing steadily with inflation (for example), the rent increases dramatically over time, making the property ineligible for a mortgage and potentially valueless. Typically the details of the rent are hidden in the small print. In these circumstances, do the buyers have a claim against their solicitor to recover their losses?

“It is the solicitor’s duty to give their clients clear advice as to what they are buying and in particular point out onerous covenants or clauses in the legal documentation,” said Jan Max Samuel, senior litigation partner, Samuels Solicitors.  “In the case of steeply escalating ground rents, this should be pointed out to a buyer and if the solicitor fails to do so, then that is negligent.”

Taylor Wimpey have been identified as a builder adopting this practice. For example, in one case reported in The Guardian, what started off as a nominal ground rent would ultimately spiral to £8,000 a year.

In this instance, the wife of Sean Greenwood paid £101,000 for a flat in the new Gornal development on the outskirts of Dudley. Now however, they cannot gain a mortgage on the property because of a clause in the leasehold agreement, ultimately rendering the property worthless.

Samuels Solicitors are currently investigating cases where solicitors have failed to properly advise property owners and are helping those affected to receive full compensation for their losses.

Have you experienced unfair ground rent clauses? Or are you concerned that your solicitor may not have given you all the vital information? Then you can contact us by calling 01271 343457 or via email for advice and reimbursement.


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