Ground rent

Ground rent is the rent a leaseholder pays to the freeholder for the use of the land their flat sits on. It is separate from service charges and follows different rules.

What changed in 2022

The Leasehold Reform (Ground Rent) Act 2022 restricts ground rent to one peppercorn (effectively zero) on most residential leases granted on or after 30 June 2022. Older leases keep their original ground rent terms.

PropLink supports both regimes:

• Peppercorn leases can be marked as such. PropLink shows the peppercorn ground rent on the lease record but does not generate a demand.
• Pre-2022 leases retain their original ground rent amount and review pattern. PropLink generates demands as the lease specifies.

Configure ground rent on a lease

1. Open the unit or lease record.
2. Click the Ground rent tab.
3. Enter the annual amount as set out in the lease.
4. Choose the frequency: annual, half-yearly or quarterly.
5. Choose the review pattern: fixed, doubling, RPI-linked, or stepped.
6. Set the next review date if the lease has one.
7. Save.

Generate a ground rent demand

1. Open Site → Financials → Ground rent.
2. Choose the demand period (the next one due is preselected).
3. Pick the issue date and due date.
4. Choose Approve and send to issue immediately or Create as draft.
5. PropLink generates one debtor invoice per leaseholder for the ground rent due.

Section 166 notices

Under Section 166 of the Commonhold and Leasehold Reform Act 2002, a leaseholder is not liable to pay ground rent until the freeholder has served a prescribed-form notice. The notice must:

• State the amount due.
• State the due date (between 30 days and 60 days from the date of the notice).
• Include the prescribed information about leaseholder rights.

PropLink generates the Section 166 notice automatically when you raise a ground rent demand. The notice goes alongside the invoice and is recorded against the unit.

Ground rent arrears

If ground rent goes unpaid, PropLink runs the same arrears workflow as for service charges. See Arrears management.

A separate ground-rent ageing report is available under Reporting → Aged debtors → Ground rent.

Ground rent and freeholder income

Ground rent is income to the freeholder. PropLink keeps it in a separate ledger account so freeholder payouts are calculated on ground rent and admin fees only, not on service charge income (which belongs to the leaseholders collectively).

See Freeholder income and payouts.