Accord Lets Dispel Ground Rent Confusion
11 May 2009
The world is becoming an increasingly difficult place for property owners, especially when keeping up with the ever-changing legislative issues surrounding EPC’s, gas and electric. Now Accord Lets, the premium letting agent in Birmingham city centre, are launching their very own guide to Ground Rents, after it emerged that landlords visiting the firm often required more information on one of properties most important areas.
Carl Mimmack from the firm who offer not just Birmingham apartments to let but property to rent in Leamington and Warwick property to let, said, “ The rent of a house can be separated up into two parts, one the ‘building rent’ and the other the ‘Ground Rent’. Rental properties are often subject to Ground Rent because the leasehold is a tenancy, this means that when a freehold property is sold on a long lease, and either used to build a selection of home, an apartment block or even used for a single house, this will have to be paid.”
If you are converting an old building into apartments to then sell them on individually at a later date you will need to create a leasehold/freehold structure, in order to handle the property maintenance and collective block insurance. This can be dealt with in a few ways. Firstly, some developers may get a third party to handle the administration and management of the block, particularly if this is not the developers main place of residence. This can be very lucrative for the developer as the freehold ground rent can be sold for a high multiple of the passing income.
Another way of approaching this, would be to include a share of the freehold in the purchase of a leasehold flat, which would then bring the ground rent down to an insignificant value.
So what does this mean for the tenant? The Ground Rent for the tenant is usually a rather small fee that you will have to pay the freeholder as a condition of your lease with them. This payment will usually add up to around £100-£200 per year. Any information about your ground rent and how it can be paid will be in your lease.
Mr Mimmack, from the firm who specialize in providing tenants with properties to let in Leamington, ranging from apartments to family sized homes, added, “Ground Rents can become extremely difficult for the landlords, as the tenant does not have a legal obligation to pay it unless the freeholder has formally asked for it. Usually this request is sent to the property and must include valid information including the tenants name, address, the amount payable, the period that the demand covers and the date that the Ground Rent is due. Problems can arise if the exact wording of the document does not comply with the regulations and when a ‘note to leaseholders’ is not sent out with the document to outline the tenant’s rights. This is why going with an agent makes sense- all of this is taken care of for you.
“Those who do not pay the Ground Rent when required, can be taken to court so it is essential that anyone who does not understand what is required of them seeks further advice. We ask anyone who is not sure of their rights regarding Ground Rents to visit our website at http://www.accordproperty.co.uk/, for more information.
About Accord
Accord was formed in 1990 with the aim of providing a professional, approachable, honest and caring service.
They are a premium-letting agent with property to let in Leamington, Birmingham and Warwick.
They believe that they have been able to hold on to these principles and that is the reason why so many of their clients have continued to use them. Their clients include a mix of prospective tenants and property owners, and they are proud that their clients still recommended them to others.
Currently the company has two offices: one in Birmingham city centre and the other in Leamington Spa.
As a company they are committed to building long-term relationships as they have found that property letting is not just about property and systems but, most importantly, about people.
You will find the company harnesses the latest technology to present properties well and as widely as possible, communicates efficiently and effectively and believes strongly in personal customer service.