£13,000 Compensation for Leaseholder in Ground Rent Claim
A Leasehold Ground Rent Claim Case Study - Client Situation
Mr S was looking forward to buying his home and put an offer in for a leasehold house that looked like a good deal.
After deciding to buy the leasehold house, Mr S got a phone call from his Conveyancing Solicitor who told him that the ground rent would be £280 a year.
Even though Mr S knew how much ground rent he would be paying each year, his Solicitor didn’t advise him that that his lease had a rising ground rent clause linked to Retail Price Index (RPI). This meant that his ground rent would increase every 10 years by uncertain and potentially huge amounts. Mr S didn’t get any advice about the ground rent terms.
A few years after buying, Mr S needed to sell his home. He had agreed the sale with a buyer, but they suddenly withdrew their offer because of the terms of the ground rent clause.
He found that an escalating high ground rent, linked to the Retail Price Index, was making it difficult for him to market and sell the property.
The buyer had been advised against buying the house by their Solicitor, unless it was sold freehold. Mr S’s Conveyancing Solicitor could have advised him to make sure that the seller included the right for him to buy the freehold as part of the sale.
Mr S was then told by his Estate Agent that if he wanted to sell, he should buy the freehold. After paying £100 for a quote, he was informed that it would cost over £10,000 plus fees – almost as much as the deposit Mr S paid for the property.
Understandably, Mr S felt very let down by his Conveyancing Solicitor.
How We Helped
Mr S got in touch with Professional Negligence Solicitor, Bill Singer, who specialises in professional negligence, including Leasehold and Ground Rent Claims. Bill agreed to take on Mr S’s case on a No Win, No Fee basis.
Bill reviewed the paperwork and the leasehold agreement. Mr S also told us that he never had a face-to-face discussion with his Solicitor when he was buying the house, nor was he given any advice about the lease and ground rent clause.
The evidence clearly demonstrated that Mr S’s Conveyancing Solicitor failed in their duty to give Mr S clear advice about the lease term and ground rent clause, and they didn’t explain the impact this would have on the value of his property and the ability to sell it in the future.
We consulted a Chartered Surveyor for an expert report. The surveyor assessed the property’s decrease in value as a result of the ground rent clause. They estimated the difference in value to be around £10,500, taking into account the increase in ground rent.
Using this evidence, we put forward a claim for compensation for Mr S, holding the Conveyancing Solicitor fully accountable. We argued that they should have told him about the ground rent clause, which caused a reduction in the house’s value, and how this could affect Mr S if he decided to sell his property.
After some negotiation, the Conveyancing Solicitor agreed to pay Mr S £13,000 in compensation, which he was very pleased with.
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