Leasehold: An Agreement That Is Only Binding On The Weaker Party


This $1.6m home on Maungakieikie Avenue, in the Auckland suburb of Greenlane,
was abandoned by its owner after its ground rent increased from $6,300 to $41,500.

 

It seems to me that the market having been tested and shown that the properties (land and buildings) have little, if any, value then the lease payments should reflect this fact and be substantially lower.

I find it extraordinary that the Cornwall Trust is so blinkered that they cannot see that there is a problem. To say that they are bound by the Trust that runs the leasehold is hog wash. Anything can be changed if the will is there to do so.

 

Owners walk out as prices plummet
MATT NIPPERT

18/08/2013

Homeowners in some of the country’s most desirable streets are abandoning their homes in droves, walking away from properties worth millions of dollars because of skyrocketing lease rentals.
Owners have abandoned at least eight properties in Auckland’s One Tree Hill in the past two years, while others have sold for a fraction of the price they were bought for.
In one case, a house bought for $500,000 in 2005 was sold for just $70,000 six years later.

Read the rest here:

http://www.stuff.co.nz/business/money/9056150/Owners-walk-out-as-prices-plummet

Posted in News & Articles | 1 Reply

One thought on “Leasehold: An Agreement That Is Only Binding On The Weaker Party

  1. I have to say, I’ve heard about people walking away from leasehold properties when the ground lease got too much — but that was in the dim, distant past. The fact that it’s happening now seems unreal.

    How would you advise someone in the situation where the owner of he land is seeking astronomical lease rises?

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