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SHOULD I BUY OUT THE GROUND RENT ON MY HOUSE?

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Q.  I have recently received a request for the payment of my annual Ground Rent – a small annual sum. Along with the request for payment was an offer to buy out the ground rent to my house for a couple of hundred Euro. Do you think I should take up this offer?

 

 

A.  Some people already own the Freehold Title to their house and therefore the question of ground rent – or buying it out – does not arise. In other cases people might hold the Leasehold Title to their house and the issue will then arise.  The question of buying out the Ground Rent does not arise in regard to Apartments.

 

In the first instance you should check your Title Deeds to ascertain what interest you hold and if in any doubt consult a Solicitor.

 

In the case of people who hold the Leasehold Title as a general rule if there is less than 70 years left to run under their Lease then steps should be taken to buy out the Ground Rent. The situation becomes critical when there is less than 15 years remaining on your Lease as it becomes considerably more expensive as each year passes to buy out the Ground Rent. If the Lease expires you could end up paying up to one eight of the market price of your house.

 

However many people may find that they hold under a long Lease with more than a hundred years to run. A lot of people hold under a 150 year lease or indeed 999 years ! In that case they may not need to buy out their Ground Rent at all but there are a few cases where they may wish to do so. If , for example, there is a restrictive covenant preventing them from doing something with their property – such as building a house in a side garden which they wish to do  – they might then buy out the Ground Rent i.e. acquire the Freehold Title. In other cases the Freehold might be acquired where there is some problem with the title such as where some title documents have been lost or mislaid.

 

The important thing to remember is that if one does buy out the Ground Rent and thereby acquire the Freehold Title one should ensure that once the procedure is started that it is then completed. Under the consent procedure certain forms may be signed such as Consent Forms and these should be lodged in the Ground Rents Section of the Property Registration Authority in order to acquire what, in most cases, will be a Vesting Certificate. One should be careful not to lose this document as it is important and one should ensure that it is properly registered. It may have to be registered in the Registry of Deeds –in which case it should then be placed with the Title Deeds as otherwise problems can arise if it becomes separated – or the Land Registry depending on the title. Again if in any doubt as to the procedure which in some cases can be quite complicated it might be as well to consult a Solicitor to attend to this.

 

One can also buy out the Ground Rent by way arbitration if the Landlord is unknown or cannot be contacted by getting in touch with the Ground Rents section of the Property Registration Authority.

 

LegalEagleStar  Wednesday ,  2nd  March,  2011

Written by LegalEagleStar

March 2, 2011 at 2:42 pm

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