- Project plans
- Project activities
- Legislation and standards
- Industry context
Last edited 02 Oct 2020
The term ‘leasehold’ in property law describes a lease from the freeholder of a property that enables the leaseholder to use the property for a specified period subject to conditions set out in the lease in return for the payment of rent. At the end of the lease the premises revert to the freeholder.
Generally, in order for a lease to be enforceable, a ground rent (valuable consideration) is paid by the leaseholder to the landlord. However, historically, as the amounts payable were typically very small, some freeholders asked for peppercorns rather than money, with a phrase in the lease such as, ‘...a yearly rent of one peppercorn, if demanded’, effectively meaning that there was nothing to collect.
This has given rise to the term ‘peppercorn lease’. The phrase is now also used more generally to mean an amount that is small or insignificant, for example a ‘peppercorn payment’ for the sale of something that has little monetary value.
Ground rent is still charged by landlords, and is a condition of most leases. Ground rent is usually a small amount, typically £50 to £300 a year. If the amount is very small, or notional, it may be described as a peppercorn rent.
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 however, ground rent may still be payable.
 Related articles on Designing Buildings Wiki
Featured articles and news
Prioritising tax considerations.
The four D creative process: discover, define, develop and deliver.
National Cyber Security Centre initiative is announced.
Reviewing trends and projections.
Legislation will establish initiatives to move towards net zero.
How to document contractor employment status.
Tech tools to help manage people and space post-pandemic.
A style that ranges from mock Tudor to arts and crafts to the 'Wrenaissance'.
Free guide from Secured by Design.
BREEAM strategy for sustainability and the circular economy.
Free tool to improve the construction programming process.
Are buildings doing what they're supposed to be doing?
Cities with quick access to everything by foot or bike.
The pressures and pinch points of global destinations.