Do I have to pay ground rent? (and what to do about a demand)

If you hold a long lease that reserves a ground rent, it is a genuine debt owed to your freeholder. But it only becomes payable once a valid Section 166 demand has been served. Here is what counts, when it is due, and what to do if you think a demand is wrong.

A ground rent demand has landed and the question is the obvious one: do you actually have to pay it? The short version is that if you hold a long lease that reserves a ground rent, the rent is a genuine debt owed to your freeholder, but only once it has been properly demanded. This guide explains when ground rent is really payable, how to tell whether the demand you received is valid, what happens if you do not pay, and what to do if you think the demand is wrong.

The short answer

If your lease reserves a ground rent, you are contractually liable to pay it, and it is a real debt rather than an optional charge. But for a long residential lease the freeholder cannot just expect the money to appear. They must first serve a valid demand in the prescribed form under Section 166 of the Commonhold and Leasehold Reform Act 2002. Until they do, the rent is not yet due and you are not in arrears by failing to pay it.

So the honest answer is: yes, you have to pay a ground rent that your lease reserves, once it has been validly demanded. If you have never received a proper demand, it is not yet payable. And if your lease provides for a peppercorn (nil) ground rent, there is nothing to pay at all.

When ground rent is actually payable

Two things have to be true before a leasehold ground rent becomes due:

• your lease reserves a money ground rent (some leases set a peppercorn, meaning nil); and
• the freeholder, or their managing agent, has served a valid Section 166 demand in the prescribed form.

The Section 166 requirement is the part that catches people out. It exists to protect leaseholders: ground rent on a long lease is simply not payable until the prescribed notice has been served, and that notice must give you a payment date that is not less than 30 days and not more than 60 days ahead. No valid demand means no obligation to pay, and no grounds for any late-payment consequence. If a letter just says "you owe ground rent" without following that process, it has not yet made the rent due.

Is my ground rent demand valid?

Before you pay, it is worth a quick check. A valid Section 166 demand for a long lease should contain:

• your name as the leaseholder;
• the amount of ground rent due and the period it covers;
• the date on or before which you must pay, which must be 30 to 60 days after the notice is given;
• the freeholder's name and address (and, if that is outside England and Wales, an address here for service);
• the prescribed explanatory notes that the regulations require to accompany the form.

If the demand is missing one of these, it may be invalid, which means the rent is not yet payable on the strength of it. That said, do not simply bin a demand that looks genuine. An invalid notice can be cured by serving a fresh, correct one, and a real debt does not disappear because the first attempt was untidy. If you are unsure, ask the freeholder or agent to confirm the figures and the period in writing.

What happens if you do not pay

A ground rent that has been validly demanded is a debt, and ignoring it is not the same as it going away. The freeholder can chase the arrears and, if they remain unpaid, can ultimately pursue them as an ordinary debt in the County Court.

The much-feared remedy, forfeiture (losing the lease), is heavily restricted where ground rent is concerned. A freeholder cannot begin forfeiture proceedings for unpaid ground rent unless the amount owed is more than £350, or any part of it has been outstanding for more than three years. This protection exists precisely so that nobody loses their home over a few pounds of ground rent. In reality, the overwhelming majority of cases never get anywhere near this. They are resolved by the leaseholder simply paying the amount, or by querying it and agreeing the correct figure.

The sensible approach is to deal with a genuine demand promptly rather than let small sums accumulate, while still checking that what is being demanded is correct.

If you think the demand is wrong

If something does not look right, the amount, the period, an added charge, or the property details, raise it. Put your query in writing to the freeholder or their managing agent, keep a copy, and keep a record of any reply. Clear records protect you if there is ever a dispute about what was demanded and when.

If the disagreement is about an administration charge you believe is unreasonable (for example a fee added on top of the rent), you can apply to the First-tier Tribunal (Property Chamber) to have its reasonableness decided. The tribunal is designed to be accessible without a solicitor. This is general information about the routes available, not advice on your particular situation.

New leases may have nothing to pay

If your lease is recent, the answer may be simpler than you expect. Under the Leasehold Reform (Ground Rent) Act 2022, most new long residential leases granted on or after 30 June 2022 must have a peppercorn (nil) ground rent, so there is genuinely nothing to pay. Wider reform is also under way, and you can read where it stands in our guide to whether ground rent is being abolished.

For older leases, a money ground rent can still apply, and a valid demand still makes it due. Your lease is the document that settles which situation you are in.

A different case: if you own your freehold

One thing worth ruling out. If you own your freehold outright and pay a small yearly sum often called a "chief rent", that is not leasehold ground rent at all. It is a rentcharge, governed by different law, and the Section 166 rules above do not apply to it. If you are not sure which you hold, your title documents will say.

A note on scope: this page is general information for leaseholders about ground rent demands. It is not legal advice on your particular lease or demand. If you are unsure of your position, your lease, your title documents, or a solicitor will confirm it.