I’m buying a flat which also comes with a garage. The garage is on a separate lease. There is no service charge on the garage lease but there is a ground rent of £5. The ground rent for the flat is £13 so in theory I would be paying £18 per year ground rent.
The issue - the lease states that the ground rent review period is every five years. The price of the new ground rent is to be calculated using the monetary worth of the garage (I don’t know much more detail other than that). There are 909 years left on the lease.
My solicitor explained that the review period is too frequent which I agree with and asked sellers to vary the lease. Sellers have pushed back stating that the freeholders have confirmed that the ground rent for the garage is not collected in practice and will agree to write a letter of comfort. Letters of comfort however don’t have strong legal weight so could potentially be useless if something goes wrong. I told my solicitors to see what my lender says about it and they responded that they are happy to lend on my flat if solicitors are happy.
Also important to mention the all the leaseholding residents are part of a residents association which is the freeholder.
My solicitors think it’s too much of a risk and that the garage lease is not acceptable. I understand that there is a risk of the freeholders suddenly deciding to a) start collecting garage ground rent and b) raise it up by quite a bit but seems low considering the actual freeholders are the residents. I’m also aware that this may cause problems for me in the future when I want to remortgage. I’m not sure the sellers will agree to a DoV - is it worth walking away from the flat? I love the flat but want to be logical about this.
Solicitor is talking to their senior about it and has asked my thoughts. The flat is well priced and well located. I really like it but want to use my head which is saying just listen to the professionals lool
TLDR; garage ground rent is £5pa and is to be reviewed every five years but is not collected in practice. Bank okay with it as long as there is a letter of comfort. Solicitor seems uneasy. Freeholder is residents association. Big risk?