Lots of people across Glossop have contacted me over the summer about problems with their leasehold home.
In a leasehold, although the homeowner owns their house, they don’t effectively own the land it is built on and need to pay ground rent to the landowner, or freeholder. Some contracts state that residents also have to pay service charges for the upkeep of the roads and communal areas of the estate they live on.
These charges can add up to hundreds of pounds a year for new properties, although most in Glossop are older homes sold on long leases – often 999 years – with ground rent of as little as £1 a year.
However some freeholders seem to have become dissatisfied with collecting such nominal rents and are seeking to increase their income by levying much higher charges of around £40 for non-payment.
Homeowners are sometimes not sent an invoice for their ground rent, but are then sent an overdue notice with additional charges. If these are not paid then even higher charges are sought.
Even though the ground rent is so low, homeowners need to make sure they pay it every year if requested and to keep a copy of the invoices.
Recent court cases have clarified that unless additional charges such as for late payment fees are specified in your lease, you should not have to pay them, so do query any such high charges received.
Some homeowners have enquired about buying the freehold of their property so they don’t have the ground rent hassle every year, and some estate agents recommend it to make a house easier to sell.
But freeholders can request extortionate sums of several thousand pounds to buy a freehold – even for a ground rent of a pound a year.
The government has promised to act on this practice and is considering the different options for a set formula for buying your freehold, so you know how much it will be and can decide whether or not to purchase.
Having made the promise last year, we are still waiting for the outcome, and I have been pressing for it to happen as soon as possible.
We hope there should be a decision before the end of this year, although legislation is likely to take up to another year.
If you’re not in a rush to buy your freehold, you may decide to wait for an announcement on this before paying what your freeholder is demanding.
I have organised a coffee morning to discuss all matters leasehold in Glossop on 6th October from 10.30am to 12pm in the Labour Club on Chapel Street – do pop along to discuss with your neighbours who are probably having similar problems, or send me a message if you can’t come.
Leasehold houses can be great burden on their owners and I’m also pushing for it to be illegal for new houses as soon as possible.