Terms & Conditions

[Anonymous]

The claimant is the leasehold owner of a mews house, with less than 21 years remaining on his lease. He has to pay an annual ground rent of approximately £80 to the company that owns the development. Is he entitled to HB for his ground rent?

[Kevin D]

Assuming the rent otherwise falls within HBR 12, I can see no reason why HB wouldn’t be payable.

Regards

[Anonymous]

As an owner, why is he not excluded by Reg 12(2)(c)?

[Ozzies Mate]

Does he have any interest in the company charging the ground rent?

Am asking as have had a case where by purchasing the property entitled them to become part of the company who owned the freehold & charged the ground rent therefore effectively making the payment of ground rent to the claimant.

[Anonymous]

No , no interest in the company that owns the development – he just gets a letter once a year saying ‘Your ground rent for the year is £x, please pay by….’

[Kevin D]

Not had time to dig, but as the “ownership” is leasehold, other threads on the board have suggested he isn’t an owner as defined by HBR 2.

[Anonymous]

Right…so in other words, if you are a leasehold owner you do not own the fee simple, right?

[petedavies]

I do not think it is the term left on the lease you should be looking at – it is the term of the lease when your claimant entered into it – the exclusion will bite for a long lease even if there is only 1 yr left.

[Anonymous]

The leasehold has changed hands several times since the property was built. It was originally a 99-year lease. When the claimant bought the property, he only had the right to remain there another 15 years. Is it correct and/or fair to say that he has a long tenancy?

[Anonymous]

I agree with Pete. The crucial issue is the period for which the lease was granted.

If the lease was initially granted for 99 years and this person has subsequently bought the existing lease then, in my view, he is excluded from the HB scheme despite the fact that less than 21 years may remain at the time the tenancy was transferred. There has not been a new grant, merely a conveyance of the existing long lease.

If the circumstances differed and he had been granted a lease of less than 21 years out of a longer lease then he would not be excluded from the HB scheme.

[Kevin D]

Um, here’s the definition of “long tenancy”:

[quote:72c79d09e3]”long tenancy” means a tenancy granted for a term of years certain exceeding twenty one years, whether or not the tenancy is, or may become, terminable before the end of that term by notice given by or to the tenant or by re-entry, forfeiture (or, in Scotland, irritancy) or otherwise and includes a lease for a term fixed by law under a grant with a covenant or obligation for perpetual renewal unless it is a lease by subdemise from one which is not a long tenancy;[/quote:72c79d09e3]

[Voice of Marcus Bentley]: Yoou decide….. 😈

[Anonymous]

Seems a bit harsh to me if he’s only bought the fag end of a longer lease.

Anyway…if the lease was for a term less than 21 years, we could pay the ground rent, if it was for more than 21 years we would refuse benefit under the long tenancy provision. Either way, the point is that as a leaseholder he cannot dispose of the fee simple, so he can’t be refused as an owner. Fine.

But what about mobile homes? If a claimant owns his mobile home outright, but pays ground rent to the farmer who owns the mobile home park, why is that not ‘payments by an owner’? He has the right to dispose of the fee simple for his mobile home, but happens to have plonked it on a piece of land he doesn’t own. He [i:2a041a3e26]is[/i:2a041a3e26] an owner (of the mobile home) who makes payments (for something he does not own)…how do we get around the wording of Reg 12(2)(c)?

[Anonymous]

If he has bought the ‘fag end’ of a longer lease he can apply to have it extended for a fee (can’t remember under what provision off the top of my head).

The term ‘fee simple’ refers to the fee simple absolute in possession – which is a long winded way of saying ‘freehold’ and only applies to real estate.

The mobile home is a chattel that can be moved from place to place. A mobile home owner would therefore, as with owners of houseboats or tents, fall outside of the provisions that exclude payments in respect of freeholders and holders of a long lease.

[Anonymous]

[i:38e39f7bdb]Versteht[/i:38e39f7bdb]…thanks, CJ, now I understand what I’ve been doing for all these years!

[petedavies]

Harsh probably!
Fair – since when has the scheme been fair to all!

Lease extension is provided for under s14 or 15 (cannot remember which) Leasehold Reform Act 1967.

[Author]

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