Frequently Asked Questions

FAQ groups:

6 frequently asked questions in Leasehold ground rent:

What is ground rent?: When your house was built the landowner (freeholder) may have issued a lease to the tenant. The lease contains many restrictions and conditions relating to the use of the property and the land it's on. An annual 'ground rent' is often one of those conditions or 'covenants' to give it its legal term.
Why do I pay ground rent?: Ground rent is payable to the owner of the land on which your property is built. The value and frequency of the rent due is specified in your lease.
Why is it only a few pounds a year?: Leases are often for 999 years, and in a typical Trafford suburb where houses were built in the 1920's or 1930's the ground rent of a few pounds was obviously worth a lot more in those days but has devalued with time and inflation. The amount is fixed for the duration of the lease.
What happens if I am late in paying the ground rent?: Often nothing happens because the original freeholder or their successors aren't too bothered about arrears of a few pounds and allow them to be paid late or carried into next year. It may be a condition of the lease that the end house of a terrace has to collect the rent from their neighbours. If an agent is appointed to enforce the terms of the lease then his job will be to ensure that the rent to be paid on the date it was due.
Being in arrears could leave you open to pay administation charges incurred by late payment and court fees for recovery.
Often they will approach your mortgage lender and get them to add the bill to your mortgage which could result in you paying the additional debt over many years with interest charges raising it to several hundred pounds.
An agent or Freeholder can now only forfeit (take back) your lease if they are granted leave to do so by a Leasehold Valuation Tribunal
What is a chief rent?: If you own the freehold on your home, you may still have to pay a small rent annually to the chief rent owner. You can buy the 'chief rent' in the same way that you can buy the ground rent.
Am I liable for unpaid rent by the previous owner of my house?: The landlord can recover up to six years arrears of rent and you can be liable for rent owing before you moved in although your conveyancing solicitor should have spotted this so get in touch with them.