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I live in a property which has a garage attached which is rented to a neighbour, these are on a peppercorn rent of £1 per year. Now with a peppercorn rent I've read various descriptions which some saying you don't have to collect it, however my solicitor upon buying the property told me it was important to collect them. He did not at the time state the reason, but after doing some research it occurs to me that if the rent is not collected there could be repercussions. The property owner I rent to actually told me that he was told when buying the property that the garage would be his in ten years, this would be a terrible situation for me as the property owner.

Obviously these people are my neighbours and I don't want a dispute over this, but I don't want to potentially lose the value of my home, by not owning the garages and potentially making it unsaleable. My neighbours actually refuse to pay now, but I could be in the wrong on this one.

So my questions are:

  • Do I have to collect the peppercorn rent?
  • Is requesting the rent enough?
  • If the tenant tried to claim ownership of the garage in court, would it go in my favour?
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    Is there a reason you're not asking the solicitor why it's important? – Dale M Jan 29 '17 at 12:03
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    The solicitor was involved only when i bought the property, however i suspect i will get back in touch with them next week. – Carb Jan 29 '17 at 12:14
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    I should add i bought the property 10 years ago. I have had some peppercorn rent off both parties in earlier years however recently more hostile. – Carb Jan 29 '17 at 12:15
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    Forgive me but... your entire property is at risk, and you want to risk all this via a Q&A on a forum? Lots of respectable valuable advice here - but if I were in your shoe's I would be talking to a professional and getting advice in writing. In the event of dispute at some point in the future, a judge is unlikely to be swayed much by a print out of advice you got from the internet. – fiprojects Jan 29 '17 at 19:36
  • "The property owner i rent to actually told me that he was told when buying the property that the garage would be his in ten years," Who told him this? – Random832 Feb 1 '17 at 18:01
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If you claim ownership of property but do nothing with it for 12 years (not even collecting a £1 rent), then in due course ownership will pass to the tenants, under the doctrine of adverse possession. Your solicitor is the only person who can advise you properly, since he knows all the details; but ultimately you will have to choose between being on bad terms with these neighbours (including suing them for possession) and losing the garages.

To deal with your edit: normally, just requesting the rent is enough, even if the tenants ignore every request. However, if they specifically refuse to pay anything, they are claiming that they own the garages not you, and if you do nothing you will lose possession eventually. If you sue them for possession now, you will probably win (assuming your question is accurate and complete), but every day weakens your case. Of course, suing will be expensive and damage your relationship; but it won't be any cheaper in the future.

  • This was what i believed, and i will speak to my solicitor about this matter. However this was where i was unsure, i have requested the rent, therefore this is actively requesting payment, but it is the tenant who is refusing to pay. – Carb Jan 29 '17 at 13:00
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    A demand for payment probably qualifies as action (if you still have a copy of the letter), and so the twelve years runs from then. But if the tenant is resolved to gain possession and you are resolved to prevent them, this will end in a court hearing eventually; that is what solicitors are for. – Tim Lymington supports Monica Jan 29 '17 at 22:29
  • The rules for adverse possession have changed a lot "recently". Assuming the property is registered, the owner of record can resist an attempt to claim adverse possession - and that would be the point to start evicting the neighbour from the garage. – Martin Bonner supports Monica Feb 16 '17 at 11:06

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