Why a property owner pays ground rent
Some property owners pay rent for the land their home is built on. The landowner charges the property owner annual ground rent.
Ground rent is paid if the legal documents for a property have a lease agreement or fee farm grant.
The lease or fee farm grant will say:
- annual amount of ground rent
- rent owner entitled to the ground rent
Paying ground rent
Ground rent is usually paid every six months in May and November.
Ground rent amount
The annual amount is usually between ten and one hundred pounds.
Nominal ground rent
Very low ground rent is less than £1.00 a year. It’s known as nominal rent.
What you need for buying out your ground rent
If you want to buy out your ground rent, you must:
- apply to Land Registry
- get a certificate signed by your solicitor
- tell the rent owner
- get a copy of the lease or fee farm grant for your property
But the owners of flats and apartments can't buy out their ground rent.
Property lease or fee farm grant
You’ll need two copies of your property lease or fee farm grant. If you have a mortgage, ask the bank or building society for the property documents. If you don’t have a mortgage, the property deeds might be in a bank or solicitor’s office for safekeeping. You might need to pay for the copies.
Applying to Land Registry
When applying to Land Registry, you will need:
- to fill in and sign application Form GR1 witnessed by a solicitor, or Form GR1 (N) for a nominal ground rent
- a receipt for your most recent ground rent payment
- to pay nine times the annual ground rent for your property
- to pay Land Registry’s £50.00 fee
- a copy of your property lease or fee farm grant certified by a solicitor
To certify the copy of the lease or fee farm grant, the solicitor signs and confirms the copy is accurate. A solicitor might charge for certifying and witnessing your documents.
To download the application form you need to send Land Registry, go to:
Sending your application for ground rent redemption
You must send your application form, documents and cheque to Land Registry:
Land Registry only accepts cheques and written applications for ground rent redemption. You can’t apply online or in person with cash. Land Registry can take a week to process your application if you send them all the documents and the right fee.
Informing the land owner you want to buy out the ground rent
You must tell the land owner immediately that you’ve applied to Land Registry to buy out the ground rent. You need to fill in form GR2 and send this with a copy of your lease or fee farm grant to the rent owner. If you pay nominal ground rent, you’ll need Form GR2 (N).
To download the form you need to send the rent owner, go to:
Certificate of redemption
When your application is finalised, Land Registry will send you a certificate of redemption. This is your ground rent certificate. It’s evidence you’ve bought out your ground rent. You won’t need to pay any more ground rent. The certificate is part of your property’s title deeds.
Registering your ground rent certificate
You should register your ground rent certificate with Land Registry. A solicitor can give your advice on registering.
Example of buying out ground rent
Your annual ground rent is £100 from 1 June 2019 until 31 May 2020. You paid ground rent until 31 May 2019. You apply to buy out your ground rent on 21 August 2019. From 1 June 2019 until 21 August 2019, you owe ground rent for 82 days.
|Ground rent details||Amount|
|Annual ground rent||£100|
|Ground rent for nine years||£900.00|
|Ground rent for 82 days
82/365 x £100.00
|Land Registry fee||£50.00|
|Ground rent buy out||£972.47|
You send the ground rent buy out amount to Land Registry. You’ll need to pay the solicitor’s fee separately.
Unpaid ground rent
If you want to buy out your ground rent but there’s no proof ground rent was paid or collected, you’ll pay an extra six years’ ground rent. In the example shown, you’ll pay an extra £600.00 ground rent. Total amount will be £1572.47 for ground rent buy out.
More useful links
- Land and property registers
- Searching the Land Registry
- How to find property and land information
- Land registration publications
- The Property (Northern Ireland) Order 1997