Ground rent: am I liable for existing arrears?
Whether or not a new flat owner is liable for previously unpaid ground rent is a question that our property managers are asked from time to time. The simple answer is ‘yes’. But it’s a bit more complicated than that.
Buyers are liable for any ground rent arrears that were built up before they bought their home if the landlord has either:
• issued a demand and has not been paid; or
• arrears remain unpaid because a demand has not yet been issued.
This may seem unfair. After all, buying a flat comes with enough expenses without having to pay off someone else’s debts. But as the law stands the freeholder is within their rights to chase you for payment. This is because even though you did not build up the arrears, the landlord can take action for possession of the flat for non-payment of ground rent. This is known as forfeiture,
The way around this problem is to ensure that your conveyancing solicitor is doing his or her job properly. Prior to purchase, the seller’s solicitor should be asked to pass on any relevant financial or lease-related information. Unfortunately, there is no legal obligation to provide this, so it must be actively followed up.
As with all matters relating to buying a leasehold property, forewarned is forearmed. So it pays to know as much about your rights and obligations as a leaseholder as you can before you complete on your new home. There are some useful guides online that are well worth reading if you’re buying a flat or a leasehold house, so check out the Leasehold Advisory Service (LEASE), Propertymark or the Government website at .Gov.UK for more information.
We also have a selection of E-books on our website that will give you additional information on lease extensions, leasehold enfranchisment and the right to manage. These topics are all important for you to get to grips with as a new leaseholder.
If you have any further questions, our knowledgeable team is here to help. You can call us or ask us a question via webchat on our website.
Author : Maryanne Bowring