In the town where I practise, there are a considerable number of properties held by virtue of leases created perhaps 150 years ago, where the rent payable is less than £1. There are, of course, no escalator clauses in such leases, since at the time they were created there had been no inflation for many decades and, consequently, there was no expectation of inflation.
With the penny post, it would have been economic to collect such rents. But nowadays these small rents are not collected and indeed, on the death of the owner, as likely as not the title of his or her successors is not registered.
Until a few years ago, it was the standard practice on the sale of such a property to allow a sum equivalent to six years’ rent to the purchasers, on the basis that they would pay this if the owner of the rent ever appeared.
Regrettably, things have moved on in recent years. The courts have held that these are situations of risk. The vendor should insure because he is not able to sell with anything more than a good leasehold title and, furthermore, we must have absent landlord insurance.
When I spoke to a representative of one of the major insurance companies a year or two ago, he told me unofficially that he had never actually known a claim under a good leasehold title policy.
They had seen odd claims in respect of absent landlord insurance, but the problem here seemed to come from flats, not terraced or semi-detached properties standing full square on their own plots of land.
I hate having to go to a client to tell him that I am going to have to pay out for insurance a sum not far short of my own charges for the conveyancing work.
Quite apart from the question of rent arrears, which are normally minimal – statute of limitations should say that the maximum payable is 12 years’ rent – the main risk is that there may have been some (almost certainly inadvertent) breach of covenant on the part of the house owner. Everyone seems to know that building regulation and planning consents may be needed to effect works to a property. But it does not seem to matter how often one tells clients that landlord’s consent is needed – very few actually think of this when building an extension to their property. Of those, probably a half cannot establish who their lessor is with a view to approaching them for consent.
Surely it is time that something was done about old covenants, which are nowadays totally meaningless. Eighty years seems to be regarded as a useful period for many legal purposes. Could we please amend the law to provide that, unless the title to the reversion is registered, any right to enforce age-old covenants should be abolished. This would at least get rid of the requirement on the part of tick-box merchants to have insurance, against the risk that the descendants of a lessor who died 100 years ago might turn up out of nowhere and start throwing their weight about.
RM Napier, Albinson Napier & Co, Warrington