MHCLG have released documents related to the Leasehold Reform (Ground Rent) Bill, setting out the government’s approach to restrict ground rents in future long residential leases.

This is the first of two-part seminal legislation to reform the leasehold system. The Bill focuses specifically on ground rent clauses within future long residential leases, and further leasehold reform is to follow later in this Parliament.

This Bill will mean that if any ground rent is demanded as part of a new residential long lease, it cannot be for more than one peppercorn per year meaning that future leaseholders will not be faced with financial demands for ground rent.

The Bill bans freeholders from charging administration fees for collecting a peppercorn rent.

MHCLG are also enforcing the charging of a prohibited ground rent by way of a civil penalty regime, including fines of up to £5,000 for freeholders that charge ground rent in contravention of the Bill.

Documents relevant to the Bill can be found on the Parliamentary Bills website