Ground Rent Demand for Long Residential Lease

This Ground Rent Demand for Long Residential Lease should be used by landlords to formally request ground rent payments from tenants under a long lease. Long leases (those exceeding 21 years) often require a leaseholder to pay an annual ground rent, with the lease setting out who must pay, the amount due, and the payment schedule. 

Other Suitable Documents 

In addition to ground rent, the terms of the lease may also require leaseholders to service charges. Landlords should therefore consider using the Service Charge Demand for Residential Property to request service charge payments from tenants of long leaseholds. For variable service charges landlords will need to serve the tenant with Summary of Tenant’s Rights and Obligations for Variable Service Charge Demand alongside the formal demand. To record and communicate service charge expenditure, landlords may also find the following templates useful:

• Actual Service Charge Statement  
• Estimated Service Charge Statement for Residential Property Template 

The Leasehold Reform (Ground Rent) Act 2022

The Act introduced significant reforms to address unfair ground rent provisions in residential leasehold properties.  In recent years doubling ground rent clauses and index linked ground  rents were making it increasingly difficult for leaseholders to obtain a mortgage or sell their property. As of 30 June 2022, new residential long leases in England and Wales will require a peppercorn ground rent. Landlords are prohibited from charging administrative fees for collecting a peppercorn rent. 

Failure to comply with the Act can result in severe financial penalties.

A lease is considered a regulated lease under the Act if:

• It is a long lease - that is a lease with a term exceeding 21 years of a single dwelling; 
• it was granted for a premium;
• It is granted on, or after, the commencement date ( 30 June 2022, or 1 April 2023 for retirement homes);

The peppercorn limit will not apply in the following situations:

• lease granted before the commencement date;
• leases granted pursuant to an agreement for lease entered into before the commencement date;
• voluntary and non-statutory lease extensions which can retain the existing level of ground rent for the remainder of the original lease period but must reduce the rent to peppercorn for the extended term. (Statutory lease extensions are not covered by the Act and must already charge a peppercorn rent);
• a lease that is not a regulated lease;
• a lease  for community-led housing;
• a lease for certain financial products;
• business leases;
• shared ownership leases ( but only in respect of the landlord's share)

This Rent Demand Notice is applicable to existing residential leases which charge ground rent.

Ground Rent Demands: Legal Notice Requirements

Under Section 166 of  the Commonhold and Leasehold Reform Act 2002  the leaseholder will not be liable to pay the ground rent unless the landlord has given notice relating to the payment. The  notice must be in the prescribed form as set out in The Landlord and Tenant (Notice of Rent) (England) Regulations 2004  or the Landlord and Tenant (Notice of Rent) (Wales) Regulations 2005. The notice must state:

• The amount of rent
• The date on which it is payable; and 
• The period in respect of which it is payable

The notice must also:

• Be given not less than 30 days and not more than 60 days before the date specified as the date on which the rent is payable, and
• Be in the prescribed form.

Please note if the notice is sent by post, it must be addressed to the tenant at the property address, unless the tenant has notified the landlord in writing of a different address in which case that one must be used.  Landlords must exercise caution when posting notices. 

Completing The Form 

If this prescribed form of Rent Demand is not used, or is not completed properly, the tenant is not required to pay his or her rent until a proper demand is made. It is therefore vital that the landlord fills in the form correctly. The form includes Notes for Landlords which should be followed carefully.  If you are unclear about any aspect of the form you should seek legal advice. 

This Ground Rent Demand for Long Residential Lease is in open format. 

Optional phrases / clauses are enclosed in square brackets. These should be read carefully and selected so as to be compatible with one another. This Ground Rent Demand for Long Residential Lease is in open format. Simply enter the relevant details on the dotted lines. The remainder of the form (including the Notes for Leaseholders and Notes for Landlords) should not be altered.

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