Your lease will tell you what the ground rent for your property is or how this is calculated. The landlord cannot force you to pay more than what is set out in the lease or change the terms for the ground rent.
How ground rent can change
In your lease, your ground rent could be a fixed charge or it could increase by certain amounts at specified times.
For example, at the beginning of the lease, the ground rent may be £50 every year. It could then increase after 33 years to £100 per year and so on.
The rent could also increase as a percentage in line with some measure, such as on the rental value of the property or it could be based on a formula like
the retail prices index.
Your ground rent could also change if you extend your lease.
You cannot be charged ground rent on a residential lease that was granted on or after 30 June 2022, with certain exceptions.
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This will depend on whether you carry out the process for a lease extension under the formal or informal route.
If you extend your lease formally then you will only have to pay a “peppercorn rent” which means no ground rent at all.
If you extend your lease informally by negotiating with your landlord, you may still have to pay ground rent depending on what you agree.
Lease extension can be a difficult process. We recommend you get professional help from a solicitor and surveyor with experience in this area.
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The law says that unless your landlord sends you a demand for ground rent in a prescribed form, you do not have to pay it.
‘Prescribed’ means that the form has to follow the correct wording as required by law.
If you are selling your property and are asked by the buyer to pay any outstanding ground rent, get advice from your solicitor on how to proceed.
The landlord can only recover ground rent from the last 6 years if they have not sent you any demands.
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Under the Limitation Act 1980, your landlord can only seek to recover ground rent going back 6 years.
They may demand this in one lump sum. Check the terms of your lease.
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