£9,000 Compensation in Ground Rent Claim

Bill Singer Solicitor
Author:
Bill Singer
Solicitor, Professional Negligence and Dispute Resolution
Date:
03/12/2020

A Leasehold Ground Rent Claim Case Study - Client Situation

Mr and Mrs L were delighted when they found a 3-bed, new build house that looked like the perfect home to raise a family in.

The couple were told by their Solicitor that the leasehold house included a ground rent of £250 a year and this would increase on review by 40% every 10 years (for up to 6 reviews). They didn’t think this was much of a problem at the time as every 10 years didn’t feel too frequent.

They were only told that these increases could not be amended, and would only become excessive towards the end of the lease’s term.

They also trusted that their Solicitor would have told them if there were any issues with the ground rent clause in their leasehold agreement from a legal point of view.

Mr and Mrs L were both first time buyers and they had no full knowledge of what “leasehold” means. But despite this, their Solicitor never explained the difference between a leasehold and freehold property, and what the repercussions of a rising ground rent clause could be in the future.

So they decided to go ahead and buy the house as they trusted the legal expertise of their Solicitor.

It was only after Mr and Mrs L started to see things about the leasehold scandal on the news and social media when they started to worry. They heard about the ground rent scandal and started to wonder whether their Solicitor had let them down.

If they’d known that the ground rent clause was going to potentially prevent them from selling the house, they would have withdrawn and bought a freehold property instead.

The couple were given an offer to buy the freehold for their house at a cost of £6,250 plus their Solicitor’s fees and freeholder fees. They decided to accept the offer as they felt this was their only option.

How We Helped

Mr and Mrs L got in touch with our Professional Negligence Solicitors who specialise in Leasehold Ground Rent Claims for Compensation, and Solicitor Bill Singer took on their case on a No Win, No Fee basis.

After reviewing the files of the Solicitor who dealt with their property transaction, it was clear to see that they had failed in their duty of care towards Mr and Mrs L.

While their Solicitor had told them about the ground rent clause, they didn’t explain the repercussions of this and how it would have a damaging effect on the value of their property. Their Solicitor should have discussed this with the couple and advised them accordingly. ­

When we started the claim Solicitor, Bill Singer, consulted a Chartered Surveyor to assess the damage that the ground rent clause had had on the property. The Chartered Surveyor estimated a reduction in house value of £17,000 - a huge loss for Mr and Mrs L.

Based on this, Bill put forward a claim arguing that their Solicitor should have:

  1. Explained the legal details of buying a leasehold property.
  1. Highlighted the negative impact the ground rent clause could have on the value of Mr and Mrs L’s property, and their ability to­ sell their home in the future.

The Outcome

At first, the firm of Solicitors which had undertaken their conveyancing rejected our claim, but after some expert negotiation by Bill Singer, they offered Mr and Mrs L £9,000 in compensation which they accepted.

The couple were very pleased with this amount and are looking forward to becoming the freeholders of their home.  

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