# Ground rent

The rent a leaseholder pays the landlord under the lease, separate from the service charge, which is only payable once the landlord has sent a notice in the prescribed form.

Also called: rent, peppercorn rent.

Ground rent is the landlord's income from owning the freehold. It doesn't pay for running the building.

## Key points

- **A notice is needed first.** A leaseholder doesn't have to pay ground rent unless the landlord has sent a notice in the prescribed form. The payment date in the notice must be at least 30 and no more than 60 days after it's given (s.166).
- **RTM companies don't collect it.** The right to manage transfers management functions, not the rent, so ground rent still goes to the landlord.
- **Freehold companies may collect it.** If leaseholders own the freehold together, the company may receive ground rent, or the members may agree to reduce it to a peppercorn when leases are extended.
- **New leases.** Most new long residential leases granted from 30 June 2022 can only have a "peppercorn" (zero) ground rent (Leasehold Reform (Ground Rent) Act 2022).

## Related terms

- [Freeholder](https://runyourblock.co.uk/glossary/freeholder)
- [Service charge](https://runyourblock.co.uk/glossary/service-charge)
- [Right to manage (RTM)](https://runyourblock.co.uk/glossary/right-to-manage)
- [Insurance rent](https://runyourblock.co.uk/glossary/insurance-rent)

## Sources

- [Commonhold and Leasehold Reform Act 2002, s.166 (requirement to notify long leaseholders that rent is due)](https://www.legislation.gov.uk/ukpga/2002/15/section/166)
- [Leasehold Reform (Ground Rent) Act 2022](https://www.legislation.gov.uk/ukpga/2022/1/contents)

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Updated 22 October 2026. Source: https://runyourblock.co.uk/glossary/ground-rent