One Peppercorn Please.
Many of our investors who are not familiar with the north east are often surprised by the legal arrangement concerning what are known as ‘Tyneside Flats’.
The flats, most of which were built around 1900-1940, were designed to fill a need for high density housing. They were usually well built 2 storey terraces and semi detached properties, but split into two flats, one at ground floor and one at first floor level.
These types of properties are very popular with tenants as they are normally located in well-established residential areas and are spacious when compared to most new build properties.
Now this is the bit where we could go into detail about the legalities of the crossover lease arrangement that exists with these flats, but we won’t! We know some knoweldgeable solicitors who we’ll happilly recommend if you need advice on this area.
The bit that we find interesting is that each leaseholder should pay a rent to the landlord; if you buy the downstairs flat you pay rent to the upstairs owner. This rent is usually one peppercorn per year for 999 years.
What we really want to know is who decided on the ‘peppercorn rent’ and why a 999 year term?