Ground rent is a payment to your landlord that might be included in your lease. It is different from a service charge in that it is income to the landlord (essentially renting the land upon which your property sits). The landlord doesn’t have to provide a service in return and they are subject to different legislation to service charges.
The law requires the landlord to send you any ground rent demand in a prescribed form otherwise the ground rent is not payable. Section 166 of the landlord and tenants act 1987 requires the landlord to notify long leaseholders that rent is due. Section 166 defines what needs to be included in the rent notice and the procedure for collecting rent.
Ground Rent Arrears
Any arrears on ground rent are the liability of the current leaseholder EVEN if those ground rents relate to a period prior to ownership of the lease and EVEN if the landlord failed to demand the ground rent from a previous leaseholder. This is because even though your were not the owner at the time and not personally liable, the landlord can take action for possession of the flat (forfeiture) for non-payment of rent.
Limitation of 6 years for ground rent recovery
Under the Limitation Act 1980 the limitation period for recovery of ground rent is 6 years. This means that your landlord can only seek to recover ground rent going back 6 years.
There have been changes to legislation with the introduction Leasehold Reform (Ground Rent) Act 2022 as follows:
If your lease was granted on or after 30 June 2022
You usually cannot be charged anything more than a ‘peppercorn’ ground rent after this date. The value of this is zero so you will not have to pay anything, but it forms a legally binding contract with your landlord.
Read more about the Leasehold Reform (Ground Rent) Act 2022
If you bought a lease from another leaseholder on or after 30 June 2022 you will still have to pay ground rent to your landlord if this is in your lease. The changes only apply to new leases granted on or after 30 June 2022.