Report comment

Please fill in the form to report an unsuitable comment. Please state which comment is of concern and why. It will be sent to our moderator for review.

Comment

The Ministry of Housing, Communities & Local Government states that "...there are a number [of leases] which contain onerous review provisions, such as those that permit the doubling of the [ground] rent every 10 years."

Anon at 22.45 refers to this practice still enduring too. When I was a lad, this type of provision was known as a 'Blue Dolphin' clause after a then notorious case, and was drilled into me as a prime example of a mixture of perfidy and incompetence on the part of the lawyers involved. It is surprising, to say the least, to see that such provisions are drafted in leases now. Any solicitor failing to advise a buyer or mortgagee (in trenchant terms) on the complete unacceptability of such a provision is surely very likely to be negligent?

It used to be the case that ground rents were most commonly of a fixed sum, and it was really only in the 1960s, as inflation took hold, that means were sought to allow the real value of the ground rent to increase so inflation did not destroy their value. Some may recall that in the mid 1930s (for example) a ground rent might be £10 or £20 yearly, when a youngish solicitor's income would likely be around £500p.a.

It does not seem to me wrong in principle to cap ground rents by law. I would not advocate abolition, because in some leasehold schemes (such as where the landlord is an entity owned and controlled by the leaseholders) the ground rent income provides some cushion where lessees are late paying service charge, or there is a dispute over service charges. However there is surely no principled reason why they shouldn't be limited to say £250, with provision for increase linked to some recognised index, perhaps with a capping provision limiting any increase in the event the index goes bananas?

Your details

Cancel