Questions to Ask your Ground Rent Fund Manager

  1. Are any commissions / fees paid to you or any associates when assets are purchased or sold?
  2. What are the basis and procedures for valuing the freehold assets you purchase? Do you have an independent survey performed upon purchases? How are long-leased freeholds marked to market, and how frequently?
  3. Are any commissions / fees paid to you or any associates when leases are extended or enfranchisements take place?
  4. Are lease extensions or enfranchisements only acted upon at the leaseholder’s instigation or do you actively promote lease extensions?
  5. Are fees for collecting and managing all aspects of the ground rent / freehold (e.g. rent collection, legal enquiries, consents to assign / alterate, credit control, etc.) paid to you or do they accrue to the Fund?
  6. Does 100% of all ancillary income / fee streams associated with the owning of freehold accrue to the Fund?
  7. Do you receive insurance profit / commission and are these paid to you or do they accrue to the Fund?
  8. Do all the benefits from freeholder’s right to appoint / nominate the property’s managing agent accrue to the Fund?
  9. On which valuation basis is the fund manager rewarded – historic or current? I.e. are you rewarded for reversionary value as it accrues over time (which is in effect a reward resulting simply from the passage of time), or does the manager add quantifiable value through careful asset selection?
  10. Does your investment vehicle have a redemption timing procedure for redemptions that matches property assets?
  11. Is there clarity in the pricing of the Fund for purchases and redemptions with regard to acquisition and sale costs of the assets?
  12. Are your information technology solutions resilient and is there a disaster recovery plan in place?