This note explains the legal requirements for the billing of ground rents for residential properties.
Ground rent is payable to the landlord by the leaseholder on a date and in a fixed amount specified in the lease, or by a formula set out in the lease. It is not a service charge.
The Leasehold Reform (Ground Rent) Act 2022 abolished ground rents of more than a peppercorn in most new residential long leases granted on or after 30th June 2022.
Synopsis
A notice must be issued in the prescribed form for any ground rent to be legally due. See Appendix below for the English version of the notice.
A leaseholder has the right to withhold payment of the rent if the prescribed notice is not served.
The effect of the notice is to give the leaseholder a minimum of 30 days to pay from the date the notice is served, whatever the lease says.
No interest or other penalties for late payment are valid during that 30 day period.
Any breach of covenant to pay a ground rent in a lease has no effect without the notice.
In spring 2026, the Government has consulted on restricting ground rents in existing residential leases. Leasehold reform proposals indicate the existing ground rents are likely to be capped, proposed at £250 per annum and reducing to a peppercorn after 40 years. This is subject to legislation being enacted and managing agents should monitor implementation and review ground rent demand processes before any commencement date.
Covering Topics
- Overview
- The Prescribed Form Of Notice
- To What Address?
- How Is Service Of The Notice Achieved?
- Timing Of The Notices
- Interest And Other Charges For Overdue Payments Of Rent
- Some Alternatives For Coping With Notices
- Direct Debits
- Recovery
- Enforcement: Don’t forget about the lease
- Further Information
- Appendix - Form Of Rent Demand Notice
