Ground rent
Ground rent is a regular payment made by a leaseholder to a landlord. Ground rent is generally only a small amount, typically £50 to £300 a year. Since the introduction of the Leasehold Reform (Ground Rent) Act 2022 in many circumstances ground rent is banned, with a number of exceptions.
The lease should set out:
- The amount of the ground rent.
- The payment dates (usually annual).
- The circumstances under which the ground rent can be increased.
Ground rent is only payable when the landlord asks for it formally, setting out:
- The name of the leaseholder.
- The period covered.
- The amount.
- The name and address of the freeholder.
- The name and address of the managing agent if payment is to be made to them.
- The due date.
- 'Notes for Leaseholders' informing leaseholders of their rights and responsibilities.
Failure to pay ground rent can result in legal proceedings, and in very extreme circumstances could lead to eviction.
As ground rent is typically very low, some landlords can fail to collect it, however, they can only recover it going back 6 years.
Ground rent can generally only be increased if the lease permits, or if the leaseholder agrees to an increase, or if the property is sold.
If a leaseholder extends a lease under the Leasehold Reform, Housing and Urban Development Act 1993 they then only have to pay a ‘peppercorn rent’ effectively a ground rent of nothing. If a lease is extended by negotiation ground rent may still be payable.
Other charges that might be made by a landlord include; service charges, consents to make alterations, the provision of information when a property is being sold and so on.
[edit] Related articles on Designing Buildings
- Betterment.
- Break clauses in leases.
- Built to suit.
- Buy-to-let mortgage.
- Dilapidations.
- Housing tenure.
- Landlord.
- Leasehold.
- Leasehold Reform (Ground Rent) Act 2022.
- Lease Negotiations - Tenants Checklist.
- Licence to alter.
- Peppercorn rent.
- Property guardianship.
- Rent.
- Rent-free period.
- Rent review.
- Reversion.
- Schedule of dilapidations.
- Scott schedule.
- Service charge.
- Supersession.
- Vacant possession.
- What is a mortgage?
[edit] External references
- The Leasehold Advisory Service. Service charges and other charges.
- Shelter. Ground rent.
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