Ground Rent and Service Charges

Ground Rent
Ground rent is a fee you have to pay to the freeholder of your property, as a condition of your lease and your mortgage. As Ground Rent amounts are written into the terms and conditions of the lease, they will need to be paid on demand.

In addition to Ground Rent, managing agents or solicitors can charge fees and costs – if you feel these are disproportionate you have the right to dispute them, independent legal advice should be sought in the first instance.

Please see here for more detailed information regarding Ground Rent on the Shelter website.

What happens if you don't pay ground rent?

The freeholder cannot take any legal action against you for ground rent arrears unless they have already:

  • sent a formal demand in the correct format
  • given the correct amount of notice (30 to 60 days), and
  • you have not responded by the due date

The freeholder can take you to court if you don't pay your ground rent. It is most likely that they will try to recover the arrears through the small claims court.

The freeholder could take forfeiture action against you, which could lead to you losing your home. Forfeiture is similar to repossession and could lead to your lease being extinguished. The freeholder can only start forfeiture proceedings if:

  • you owe more than £350 in Ground Rent
  • you have been in arrears for three years or more

Special legal procedures must be followed if the freeholder wants to start forfeiture proceedings. If these procedures are not followed, the freeholder may be guilty of an illegal eviction, which is a criminal offence.

if your property is in Scotland or Ireland the above information may not apply, please contact us for more information.

Service Charges

Service charges cover costs for the maintenance of the building you live in (for example, lift maintenance and repairs) and they can vary widely in amounts.

Service charges usually cover things like repairs, cleaning and shared amenities such as porters and communal gardens. They sometimes cover buildings insurance as well, but you may have to pay for this separately.

Please see here for more information about Service Charges on the Shelter website.

What happens if you don't pay service charges?

As a property owner, you would have signed a contract or lease when you bought your property which means you are legally obliged to pay your service charges. If you do not pay, the Owners’ Management Company can take legal action against you. Any outstanding debts you have to the OMC can be tied to your property – for example, if you sell your property, the OMC can get a court judgment for your debts to be deducted from the money you get once the sale has gone through.

The freeholder could take forfeiture action against you, which could lead to you losing your home. Forfeiture is similar to repossession and could lead to your lease being extinguished. The freeholder can only start forfeiture proceedings if:

  • The amount has been determined by a leasehold valuation tribunal or by a Court.
  • You admit the amount is payable.

Special legal procedures must be followed if the freeholder wants to start forfeiture proceedings. If these procedures are not followed, the freeholder may be guilty of an illegal eviction, which is a criminal offence.

Information taken from the Consumer help website

Major works

Charges for major works are any amount costing £250 and over. For these to be deemed payable, the Managing agent or Solicitor must provide you with complete Section 20 notices. (Please see here for more information on Section 20 notices). Failure to provide Section 20 notices means regardless of the amount, they are only allowed to claim up to £250.

if your property is in Scotland or Ireland the above information may not apply, please contact us for more information.

Our Process

If you have received a letter from us regarding your Ground Rent payment, you must contact us.

It may be that we have already made the payment to the freeholder or their representative on your behalf. If this has happened we need you to repay this to us as soon as possible, within a year, to ensure you do not receive further charges.

Please note when we make this payment on your behalf, there is a charge of £30, and there will be an additional charge for every year an amount remains outstanding. You will also be charged interest on this balance.

If you haven’t already spoken to us about this, please call us as soon as possible on 0330 159 9610 between 8:30am – 6pm Monday to Friday (excluding bank holidays).

If you feel you may struggle to repay the amount, then please call us on 0330 159 9610.