Thinking about making a ground rent compensation claim? Contact us to find out how we can help
Ground Rent Claims
Daniel Brumpton

How we can assist with leasehold ground rent claims

At Nelsons, we have a dedicated team of experienced solicitors, which includes Partners, Daniel Brumpton and Cathryn Selby, who are both leading individuals in this area and are recognised by independently researched directories, including The Legal 500.

Our team are vastly experienced in advising on and investigating claims for leaseholders (both individuals and businesses) in these circumstances. The team focuses on the advice buyers were provided with by their conveyancing solicitors when they purchased the properties. If the leaseholder wasn’t provided with clear advice about the existence and implications of ground rent clauses and could not, therefore, understand the risk and impact, they may be able to successfully argue that their solicitor had been negligent and claim compensation which may assist them with the costs of buying the freehold.

We can offer comprehensive advice on the merits of a ground rent claim and how it can be funded. In the right circumstances, we will offer a Conditional Fee Agreement (also known as a No Win, No Fee agreement).

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Cases we have advised on

Our team have acted in numerous leasehold ground rent compensation claims in recent years, which includes the following:

  • Acting for a group of leaseholders in one block of new-build flats in London where the ground rent doubled every 15 years. We are in the process of obtaining damages from our client’s former conveyancing solicitors (and in some cases, we have settled cases) that will allow them to extract themselves from the onerous ground rent provisions.
  • Settled a claim against a client’s former conveyancing solicitor in Newcastle for failing to advise on the impact of a ground rent clause that was calculated by reference to the Retail Prices Index (RPI) every 15 years.
  • Acting for a professional-client who owns a number of new build homes in the North West who have houses affected by doubling ground rent clauses and RPI clauses.
  • Acting for a landlord with a small portfolio of buy to let properties that have a doubling clause for the first five reviews and will then be calculated by reference to RPI.
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Press coverage regarding the ground rent scandal

In recent years, the ground rent scandal has continued to make headlines in local, national and trade media and we have had substantial press coverage about this issue. Here are some of the articles in which we have been featured/quoted:

  • “Nelsons...client roster includes high-net-worth individuals, sports professionals and property businesses. It handles claims against solicitors and barristers, financial advisers, insurance brokers, surveyors and architects, among others. It has a notable specialism in defending professionals against claims where there is no insurance cover in place or where cover has been reserved. Although it predominantly acts for claimants, the team is also engaged by insurance companies on the defendant side.”

    The Legal 500
  • "Good communication. Helpful. Responses in good time."

    Client Feedback
  • "The terms of engagement were well set out and presented. Engagement, when the time was right, was good."

    Client Feedback
  • "Staff were extremely polite and courteous, tactful and diplomatic."

    Client Feedback

For more information on how we can assist you in making a claim, please contact our expert team of professional negligence solicitors in Derby, Leicester or Nottingham via our online enquiry form or call us for a guaranteed response.

FAQs in relation to ground rent

Below, we have answered some regularly asked questions regarding ground rent.

  • What is ground rent?

    Ground rents are annual payments property leaseholders (someone who has a temporary right to occupy property and land) have to make to freeholders (someone who has outright ownership of the property and the land on which it stands with no time limit on the ownership period).

    The relationship between the freeholder and leaseholder is governed by the terms of a contractual document called a lease.

    In recent years, housebuilders have been selling new build properties to buyers on a leasehold basis meaning the housebuilder retained ownership of the freehold. In many cases, housebuilders then went on to sell the freeholds to third parties, such as investment companies.

    The leases granted by the housebuilders to buyers are usually for a long period, such as 250 years or 999 years. One payment often provided for in long leases is a “ground rent” meant to reflect the value of occupying the land/ground.

    Other payments provided for in long leases can include fees charged by the freeholder for considering and granting permission for the buyer to make any changes to the property, such as building an extension or for agreeing to a remortgage of the property.

  • I’m a leaseholder and pay ground rent. Do I have a problem?

    Historically, ground rents were low, no more than say £50 per year. However, in the last few years, housebuilders have started to increase ground rents to an initial charge ranging from £250 to £500 a year. They have also added clauses in the lease that allow them to review the ground rent periodically, for example, every five, ten or 25 years.

    Typically the review clause allows the freeholder to increase the ground rent at each review. Problems have arisen because housebuilders have included clauses in the leases which provide for ground rents to double or increase with the Retail Price Index (RPI).

    If you are a leaseholder who purchased a new build property in the last ten years you should check your lease to see what it says about ground rent and what you can expect to pay.

  • Is a ground rent that doubles every 10, 15 or 25 years that bad?

    In theory, it’s not. However, most new leases are set for a long term such as 999 years. If a ground rent of £250 per year doubles every ten years you can expect to pay £16,000 per year after 50 years. For many people that is simply unmanageable.

  • Will I have a problem selling my leasehold property due to escalating, doubling or RPI linked ground rent?

    Unfortunately, because of national publicity, many buyers are now aware of the problem and will not buy a property with an onerous ground rent clause. The existence of such clauses has also led to banks and building societies refusing to lend on those properties.

    This means that in the unlikely event that a buyer is still prepared to buy a property affected by a ground rent clause they are highly unlikely to be able to obtain a mortgage to complete the purchase. This clearly has a huge effect on the value of these properties and in some cases they may well be worthless.

    Even to a cash buyer, a property affected by the onerous ground rent terms will be unattractive, as the burden of the clause will be inherited via the purchase.

  • What can I do if I am affected by escalating, doubling or RPI linked ground rent?

    If you have the finances you could try and purchase your freehold from the freeholder but in many cases, the price of the freehold is vastly inflated amounting to tens of thousands of pounds.

    In theory, it might also be possible to agree to amendments to the terms of the lease and the ground rent clause but this is also likely to come at a significant cost.

    Finally, you may have a claim against the solicitors that you instructed to help with the purchase of the property. If the solicitor failed to give you clear advice about the existence and implications of an onerous ground rent clause so that you could understand the risk and the impact then you may be able to successfully argue that your solicitors have been negligent.

Thinking about making a ground rent compensation claim? Contact us to find out how we can help