Who is Somerdawn?
Somerdawn, formed in 2002, is a small family owned company that primarily owns and manages a portfolio of ground rents and rent charges. Somerdawn has been owned and run by the Spencer family since 2009. We are committed to a high standards of business ethics based on honesty and professionalism.
Refunds & Cancellations
- If we have made a mistake with what you have been charged or we cannot deliver what you have paid us for, we will refund the amount concerned.
- If you pay for rent or services we have provided, then generally these amounts are not refundable.
- If you buy out your rent and change you mind, then any refund will depend on on what stage the buy out is at. The refund will vary between:
- the full amount you have paid less our administration costs (typically £50.00) and
- zero where the buy out process is completed or is committed to complete, for example where the transfer documents have been prepared, executed and submitted to the Land Registry.
What is a 'Ground Rent'?
The contemporary accepted meaning of ground rent is the rent at which land is let for the purpose of improvement by building: i.e. a rent charged relating to the value of the land only and not in respect of the buildings to be placed thereon. Thus even when the rent was originally set, it was usually lower than the rent that might be achieved for a building let on the open market, typically about 1/3 of the properties rental value. The lease periods are also set for a longer term, a minimum of 21 years and commonly 99, 125 or 999 years.
Usually the owner of the right to collect the rent is the Freehold Title owner (the Freeholder) and the rent is paid by the person(s) who owns the Leasehold Title (the Leaseholder). This Leasehold title contains the right to occupy the land, whilst the Freehold title gives the Freeholder the right to collect the ground rent and exercise a degree of control over the property. One common misconception because of the term 'Ground Rent' is that the Freeholder only 'owns' the land. Legally this is not true, the Freeholder's entitlement, defined by the associated deeds, will invariably require the return of both the land and any buildings upon that land at the expiry of the lease (or if the lease is forfeited due to Leaseholder not complying with the terms of the lease). The term 'Ground Rent' comes from the original setting of the rent amount influenced by the land value not what is 'owned'.
Traditionally most of the Ground Rents become due on the 'quarter days' which were the four dates in each year on which servants were hired, school terms started, and rents & taxes collected. They fell on four religious festivals roughly three months apart and close to the two solstices and two equinoxes, Lady Day (25 March), Midsummer Day (24 June), Michaelmas (29 September) & Christmas (25 December).
Quarter days have been observed since at least the Middle Ages, and they ensured that debts and unresolved lawsuits were not allowed to linger on. Accounts had to be settled, a reckoning had to be made!
Under the terms of a lease agreement, that could be a period anywhere from 21 to 999 years, the Freeholder grants permission for a Leaseholder to take ownership of the property for the specified period of time, subject to during this period that the Leaseholder pays the rent on time and obeys any other covenants (requirements) of the lease. In the majority of leases, these covenants include requirements for the Freeholder to be notified or their consent obtained; of any change of Leaseholder; any mortgage obtained on the property; any alterations made on the property; and that the property be kept in good condition and kept insured, often by an insurer approved by the Freeholder. Somerdawn as your Freeholder is a business and charges fees associated with our rights as specified in your lease.
Some leases also have less common covenants. They include; consent being required prior to selling a property; purchasers being required to enter into a deed of covenant with the Freeholder (typically to formally accept the covenants contained in the lease); that in the event of the Leaseholder being declared bankrupt, the property reverts back to the ownership of the Freeholder. This right takes precedence over the rights of any mortgagee or other family members.
The Commonhold and Leasehold Reform Act 2002 and The Landlord and Tenant Regulations 2004 now govern the form of notice that needs to be issued to collect ground rent. The most common notice is the section 166 which Freeholders are required to serve upon the Leaseholder in order to collect the rent. Somerdawn gets quite a lot of complaints from our tenants on this form. As is typical when bureaucrats get involved, the s166 is quite hard and confusing to understand and can be interpreted as quite threatening in its wording. Our apologies but we have no choice in this!
Inflation has eroded the value of most ground rents with long leases and non-rising incomes, so rents are often now very small.
It is easy and understandable that Leasehold property owners because of these often negligible rents, fail to understand the importance of ensuring they keep in compliance with the terms of their lease. Virtually all leases allow the Freeholder faced with a Leaseholder in breach of the lease due to the failure to pay the service charges, ground rent or administration charges or to obey the covenants of the lease, to forfeit the lease and to repossess the property. Originally this could be done when the rent was a little as 30 days overdue but modern legislation, especially the Commonhold Act of 2002, now only allows this to occur once amounts have been owing for three years or more or if the amount owed exceeds £350.
Somerdawn is happy to sell it's Freehold interest to the leaseholder, which will eliminate not only the Ground Rent but also the associated covenants. The cost varies based on the Ground Rent and the covenants contained in the lease but it is typically in the £500 to £1,000 range.
What is a 'Rent Charge'?
Some of the rents Somerdawn collects are 'Rent Charges'. These are rents collectable on Freehold properties. Confusion can occur as whilst Freehold and Leasehold titles are now commonly registered with the Land Registry, Rent Charges are rarely registered due to the economics involved. However just because the Rent Charge is not registered does not mean in any way that it is not legal and requiring payment. Understandably people who have bought a Freehold home may be surprised that they still have to pay a rent!
The expression Rent Charge refers to a perpetual yearly rent charge, created by a Conveyance or Transfer of Freehold land and usually contains various covenants similar to those described above in the Ground rent section.
The expression Chief Rent is used to describe a rent which has no head rent payable out of it, but is also widely used, incorrectly, to describe a Rent Charge.
Somerdawn is happy to redeem Rent Charges, which will eliminate not only the Rent Charge but also the associated covenants. The cost varies based on the rent collectable and the covenants contained in the deeds but it is typically in the £100 to £400 range.
Freeholders also have the right to apply to the Department of Communities & Local Government to extinguish the rent but this process only abolishes the actual rent and not any associated covenants. There are costs and legal fees associated with this process also.
What is a Head Leasehold title?
The great majority of Somerdawn's Ground Rents are collected where Somerdawn owns the Freehold and we collect rent from the Leaseholder who occupies the property.
However sometimes the situation becomes more complicated and a property may have multiple Leasehold titles associated with it (there can only be the one Freeholder). So the Leaseholder who occupies the property may pay their rent to another Leaseholder who owns the Leasehold title to say the whole side of the street. This 'Head Leaseholder' in turn may pay a 'Head Rent' to another higher Head Leaseholder or the Freeholder, who may for example own title to the both sides of the street.
Somerdawn owns a number of Head Leasehold Titles. Somerdawn is happy to sell its Head Leasehold interest to the Leaseholder, however this will eliminate only the Ground Rent not the associated covenants. The cost varies based on the Ground Rent but it is typically in the £300 to £800 range. You will need to talk to us directly if you wish to buy out our head leasehold interest as we want to ensure you fully understand the situation.
Fees and Charges
In the event that your ground rent is not paid by the required date &/or Notice of Assignment (Transfer) is not served, fees may be charged. Additionally your lease is likely to require our consent for building alterations/extension or Insurance provider, etc. Fees apply.
|Consent Fees (Deed of Consent/Covenant, Property extension/alteration)||From £35|
|Arrears Letter (per Letter)||From £15|
|Notice Fee (per Notice, Assignment or Charge)||From £39|
|A Land Registry Search||From £20|
|Informing Mortgage Company of Arrears||From £30|
|Arrears file preparation Pre-Action||From £40|
|Returned Cheque (unsigned, incorrect amount, etc)||From £15|
Note: Significant additional charges may be incurred if legal action becomes necessary to collect arrears.
There follows more information whose wording is dictated by UK legislation.
Administration Charges – Summary of tenants’ rights and obligations
- This summary, which briefly sets out your rights and obligations in relation to administration charges, must by law accompany a demand for administration charges. Unless a summary is sent to you with a demand, you may withhold the administration charge. The summary does not give a full interpretation of the law and if you are in any doubt about your rights and obligations you should seek independent advice.
- An administration charge is an amount which may be payable by you as part of or in addition to the rent directly or indirectly:
- for or in connection with the grant of an approval under your lease, or an application for such approval;
- for or in connection with the provision of information or documents;
- in respect of your failure to make any payment due under your lease; or
- in connection with a breach of a covenant or condition of your lease.
- If you are liable to pay an administration charge, it is payable only to the extent that the amount is reasonable.
- Any provision contained in a grant of a lease under the right to buy under the Housing Act 1985, which claims to allow the landlord to charge a sum for consent or approval, is void.
- You have the right to ask a leasehold valuation tribunal whether an administration charge is payable. You may make a request before or after you have paid the administration charge. If the tribunal determines the charge is payable, the tribunal may also determine:
- who should pay the administration charge and who it should be paid to;
- the amount;
- the date it should be paid by; and
- how it should be paid.
- However, you do not have this right where:
- a matter has been agreed to or admitted by you;
- a matter has been, or is to be, referred to arbitration or has been determined by arbitration and you agreed to go to arbitration after the disagreement about the administration charge arose; or
- a matter has been decided by a court.
- You have the right to apply to a leasehold valuation tribunal for an order varying the lease on the grounds that any administration charge specified in the lease, or any formula specified in the lease for calculating an administration charge is unreasonable.
- Where you seek a determination or order from a leasehold valuation tribunal, you will have to pay an application fee and, where the matter proceeds to a hearing, a hearing fee, unless you qualify for a waiver or reduction. The total fees payable to the tribunal will not exceed £500, but making an application may incur additional costs, such as professional fees, which you may have to pay.
- A leasehold valuation tribunal has the power to award costs, not exceeding £500, against a party to any proceedings where:
- it dismisses a matter because it is frivolous, vexatious or an abuse of process; or
- it considers that a party has acted frivolously, vexatiously, abusively, disruptively or unreasonably.
- The Lands Tribunal has similar powers when hearing an appeal against a decision of a leasehold valuation tribunal.
- Your lease may give your landlord a right of re-entry or forfeiture where you have failed to pay charges which are properly due under the lease. However, to exercise this right, the landlord must meet all the legal requirements and obtain a court order. A court order will only be granted if you have admitted you are liable to pay the amount or it is finally determined by a court, a tribunal or by arbitration that the amount is due. The court has a wide discretion in granting such an order and it will take into account all the circumstances of the case.
What information do we collect about you?
We maintain data on each property with which we have dealings as to its ownership. The information we collect about individuals is limited to basic contact information, i. e. name, address, email and telephone numbers. We also hold copies of any correspondence that has passed between us or relates to the property, Website usage information is collected using cookies.
How will we use the information about you?
We collect information about you for the following reasons:
- To process your request or order
- To manage your account
- We use your information collected via cookies on our website to personalise your use and improve our website.
Somerdawn Limited will not share or sell any of your information to anyone outside of Somerdawn Limited, unless we are required by law; where it is necessary to administer the relationship between us or where we have another legitimate interest in doing so.
Personal information which we hold is available to be viewed through our website and is provided free of charge. Requests for information that are considered manifestly unfounded, excessive or repetitive, may incur a small charge to cover the administrative cost of providing the information.
We want to make sure that your personal information is accurate and up to date. You may ask us to correct or remove information that is incomplete or inaccurate.
Retention of your data
We understand our legal duty to retain accurate data and only retain personal information for as long as it is required. You have the right to ask us to delete or remove personal information where there is no good reason for us continuing to process it. We may be legally required to retain some information e.g. contact information, to ensure we remember your request to remove your personal information and ensure we do not inadvertently re-add your personal information to our systems. We will remove data that we no longer have a legitimate business interest in maintaining.
We have put in place commercially reasonable and appropriate security measures to prevent your personal data from being accidentally lost, used or accessed in an unauthorised way, altered or disclosed. In addition, we limit access to your personal data to those employees and other third parties who have a business need to know. They will only process your personal data on our instructions and they are subject to a duty of confidentiality.
We have put in place procedures to deal with any suspected data security breach and will notify you and any applicable regulator of a suspected breach where we are legally required to do so.
If you have a serious concern about how we handle your information, or would like to lodge a complaint, you may do so by contacting the appropriate supervisory body, which in the United Kingdom is the Information Commissioner’s Office. The ICO can be contacted through this link: https://ico.org.uk/concerns.