Acting on a Conditional Fee Agreement, our Lee Silk and Uzair Zafar recently secured a successful settlement for their clients in a professional negligence claim against a firm of solicitors who provided negligent advice regarding a residential property purchase.
The negligent advice related to a doubling ground rent clause in the lease. Doubling ground rent clauses are emerging as a point of contention in many property purchases and sales now, as a result of the widely publicised “ground rent scandal” in 2017.
It was alleged, during their instruction, that the firm in question failed to properly advise on the implications of the doubling ground rent clause on the future saleability and marketability of the property. As a result, and on trying to sell their property, our clients were unable to do so due to the doubling ground rent clause being flagged by prospective purchasers’ lenders as a red flag.
Due to the firm’s negligence in having failed to properly advise on the ground rent clause, our clients were forced to incur substantive legal costs in negotiating a deed of variation to reduce the ground rent clause to a peppercorn so that their property sale could proceed.
The firm argued that it had discharged its duty of care towards our clients by merely flagging the existence of the ground rent clause. Substantive and complex legal arguments followed concerning the standard of advice that should have been given and whether a reasonable and competent solicitor would have advised on the effect of the clause, given doubling ground rent clauses are inherently unusual in nature.
The claim settled at a pre-action stage and prior to the need for proceedings to be issued. The settlement achieved is a fair and reasonable one, which adequately compensates our clients for the losses suffered. The settlement also extends to our clients’ legal costs.