Hello
My girlfriend is selling her property and the buyers lender has got back concerned about increases in ground rent. The main issue being that it would increase to £8,000 a year in 30 years time. This sounds ludicrous to me. I would be grateful if anyone could shed some light on it for us. Please see the section from the lease below, many thanks:
Definitions
Rent: Means the yearly rent of £150 payable by two equal payments in advance on the 1st of January and the 1st of July in each year as adjusted pursuant to the provisions of clause 9 hereof.
Review Dates: Means (subject to provisions of clause 9.2 hereof) the 10th anniversary of the date of commencement of the term and each successive 10th anniversary thereafter up to and including the 50th anniversary of the date of commencement of the term.
9 Rent Review
9.1 The rent hereby reserved shall on each of the review dates be increased to such sum as is double the amount of the rent imdeiately prior to such review.
9.2 If on any of the review dates there shall be enforced legislation which
9.2.1 prevents restricts or modifies any revision or increase in the rent (or the management company's right to receive the same) pursuant to the provisions of this lease or
9.2.2 prohibits or restricts (as a result of the amount of the increased rent that would otherwise be payable):-
9.2.2.1 the charging of any premium on an assignment or transfer of this lease or
9.2.2.2 the right of the management company to receive the rent and/or the maintenance charge provided for herein or to enforce the covenants herein contained on the part of the buyer
then the review date affected there by shall be postponed until the expiration of three months from the date upon which such prevention restriction or modification is removed relaxed or modified and the management company shall then be entitled to recover any resulting increase in the rent with effect from the postponed review date as shall then be permitted by law provided that nothing herein shall be construed as varying any subsequent review date.
9.3 any dispute as to the amount of any adjustment to the rent shall be determined in exactly the same manner as provided for in paragraph 4 of part 1 on the sixth schedule hereto.
My girlfriend is selling her property and the buyers lender has got back concerned about increases in ground rent. The main issue being that it would increase to £8,000 a year in 30 years time. This sounds ludicrous to me. I would be grateful if anyone could shed some light on it for us. Please see the section from the lease below, many thanks:
Definitions
Rent: Means the yearly rent of £150 payable by two equal payments in advance on the 1st of January and the 1st of July in each year as adjusted pursuant to the provisions of clause 9 hereof.
Review Dates: Means (subject to provisions of clause 9.2 hereof) the 10th anniversary of the date of commencement of the term and each successive 10th anniversary thereafter up to and including the 50th anniversary of the date of commencement of the term.
9 Rent Review
9.1 The rent hereby reserved shall on each of the review dates be increased to such sum as is double the amount of the rent imdeiately prior to such review.
9.2 If on any of the review dates there shall be enforced legislation which
9.2.1 prevents restricts or modifies any revision or increase in the rent (or the management company's right to receive the same) pursuant to the provisions of this lease or
9.2.2 prohibits or restricts (as a result of the amount of the increased rent that would otherwise be payable):-
9.2.2.1 the charging of any premium on an assignment or transfer of this lease or
9.2.2.2 the right of the management company to receive the rent and/or the maintenance charge provided for herein or to enforce the covenants herein contained on the part of the buyer
then the review date affected there by shall be postponed until the expiration of three months from the date upon which such prevention restriction or modification is removed relaxed or modified and the management company shall then be entitled to recover any resulting increase in the rent with effect from the postponed review date as shall then be permitted by law provided that nothing herein shall be construed as varying any subsequent review date.
9.3 any dispute as to the amount of any adjustment to the rent shall be determined in exactly the same manner as provided for in paragraph 4 of part 1 on the sixth schedule hereto.