Frequently Asked Questions

Paying your ground rent is usually a condition of your lease and is an unavoidable legal requirement. You will need to prove you have paid your ground renbefore you can sell your lease or make property alterations. 

We issue ground rent demand notices 30 days before the due date (in accordance with the Leasehold Reform Act) and there are penalties for non-payment. If we have not received a payment from you 14 days after the due date, we send: 

  • a first reminder letter, which will not incur a fee;
  • a second reminder letter (7 days later), for which you are charged £45;
  • if the invoice has still not been settled after another 7 days, then you will be charged a court referral fee of £100 and you will receive a letter informing you that your landlord has instructed solicitors to carry out enforcement action. 

If you have a query about a ground rent notice or reminder, or you have difficulty paying, then please contact us as soon as possible and we pledge to deal with your queries as effectively as possible. 

Unfortunately, ground rent is based on the property rather than on ownership and under the Limitation Act of 1980 you could be liable for up to six years of ground rent arrears. 

Your solicitor should have advised you about any ground rent arrears at the time of purchase. If they didn’t you may need to seek independent advice. 

If you pay using HomeGround's online system, you can view your payments on My Transacitons or request a statement emailed directly to you from your My Dashboard. 

If the sale is completed before thinvoice is due to be paid, we will update our records and reissue the invoice to the new owner. 

If the sale is not completed by thdate payment is due, as the leaseholder you remain liable for the ground rent and the outstanding amount will need to be settled in full. Your solicitor should arrange for you to be reimbursed by the purchaser for the period when you are not the leaseholder. 

Underinsurance due to incorrect building reinstatement values is one of the most common issues when it comes to the equitable settlement of insurance claims. It is essential therefore, to get this right in the first place. This guide explains how and why we instruct a valuation of your property.

A Reinstatement Cost Assessment for building insurance purposes is a professional calculation of the cost to rebuild a property, including, demolition, professional fees and VAT. This should be carried out by a fully qualified and RICS regulated  organisation / person, who will advise on the correct Declared Value which should be used for insurance purposes

A Declared Value is the value declared to insurers as the full cost to reinstate the building if this were totally destroyed (including demolition, professional fees and VAT). The Declared Value is one of the key factors used by insurers to calculate the insurance premium they require for the insurance cover provided.

The insurance policy contains an average condition that stipulates that if at the time of a claim, the Declared Value shown on the insurance certificate is less than the actual cost to reinstate, the insurer only needs to pay the same proportion of the claim as the Declared Value represents of the actual value at risk.

For example, should your property be insured for an amount which is 50% of the total cost to rebuild, then ANY claim made will be
settled by insurers at 50% of the total claim/reinstatement cost, as shown below:

  1. Declared Value £150,000 vs actual value at risk (as evidence by an RCA) £300,000 = 50% “insured”
  2. A claim occurs for water damage to the inside of the building, and the cost to repair the building is estimated at £20,000.
  3. Insurers will settle this claim at £10,000 and require that the building Declared Value be increased and an additional premium paid for the increase

The average clause does not apply provided that valuations are carried out by qualified RICS members at regular intervals and the results provided to insurers, and an inflationary increase (index linking) is applied at each policy renewal in the years between an RCA.

‘It is prudent to incorporate recommendations within the report to the effect that the client needs to reassess the declared value on a regular basis, with an annual adjustment to reflect inflationary effects, and a major review and reassessment every three years, or earlier should significant alterations be made to the insured property.’
RICS GUIDANCE NOTE, FEBRUARY 2018

To protect against inflationary increases to the costs of material and labour to reinstate, insurers apply a UK average percentage increase to the declared value at policy renewal. Ensuring therefore, that the Declared Value remains true over the years.

The percentage increase is calculated using the RICS Building Cost Information Services – an industry recognised data set.

It is critical that Reinstatement Cost Assessments are carried out on a regular basis to ensure you have the appropriate level of insurance cover. Some insurance policies will specify maximum periods of time between each RCA, and others require these are carried out “regularly” but don’t specify how frequently this is.

As always, the HomeGround insurance team are here to help, please contact us at insurance@homegroundonline.com with any queries. Stay safe.

A Reinstatement Cost Assessment for building insurance purposes is a professional calculation of the cost to rebuild a property, including, demolition, professional fees and VAT. This should be carried out by a fully qualified and RICS regulated  organisation / person, who will advise on the correct Declared Value which should be used for insurance purposes

A Declared Value is the value declared to insurers as the full cost to reinstate the building if this were totally destroyed (including demolition, professional fees and VAT). The Declared Value is one of the key factors used by insurers to calculate the insurance premium they require for the insurance cover provided.

The insurance policy contains an average condition that stipulates that if at the time of a claim, the Declared Value shown on the insurance certificate is less than the actual cost to reinstate, the insurer only needs to pay the same proportion of the claim as the Declared Value represents of the actual value at risk.

For example, should your property be insured for an amount which is 50% of the total cost to rebuild, then ANY claim made will be
settled by insurers at 50% of the total claim/reinstatement cost, as shown below:

  1. Declared Value £150,000 vs actual value at risk (as evidence by an RCA) £300,000 = 50% “insured”
  2. A claim occurs for water damage to the inside of the building, and the cost to repair the building is estimated at £20,000.
  3. Insurers will settle this claim at £10,000 and require that the building Declared Value be increased and an additional premium paid for the increase

The average clause does not apply provided that valuations are carried out by qualified RICS members at regular intervals and the results provided to insurers, and an inflationary increase (index linking) is applied at each policy renewal in the years between an RCA.

‘It is prudent to incorporate recommendations within the report to the effect that the client needs to reassess the declared value on a regular basis, with an annual adjustment to reflect inflationary effects, and a major review and reassessment every three years, or earlier should significant alterations be made to the insured property.’
RICS GUIDANCE NOTE, FEBRUARY 2018

To protect against inflationary increases to the costs of material and labour to reinstate, insurers apply a UK average percentage increase to the declared value at policy renewal. Ensuring therefore, that the Declared Value remains true over the years.

The percentage increase is calculated using the RICS Building Cost Information Services – an industry recognised data set.

It is critical that Reinstatement Cost Assessments are carried out on a regular basis to ensure you have the appropriate level of insurance cover. Some insurance policies will specify maximum periods of time between each RCA, and others require these are carried out “regularly” but don’t specify how frequently this is.

The increased scale and potential for rapid fire spread is of major concern. As we see from fires in “high rise” buildings across the world it is particularly problematical for fire authorities to fight these fires effectively. Insurers will have expected to lose c.35% of a compliant building in the event of a fire, but where defects are present this is now estimated at much closer to 100%. With the likelihood of an expensive claim now increased, the cost to insure will certainly rise and in many cases insurance companies will be reluctant to provide any cover.

There has been focus on many different types of cladding such as ACM (Aluminium Composite Material) and HPL (High Pressure Laminate) which have grabbed many of the headlines in the press. Just as crucial is the type and combustibility of the insulation that is being used and the compartmentation of areas behind the cladding. Large cavities behind the cladding and ineffective fire barriers can allow fire to spread quickly and increase the scale of loss.