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cityguru
cityguru, Solicitor
Category: Property Law
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Experience:  solicitor
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a Lease has been extended. the Leasholder/tenant has received

Customer Question

a Lease has been extended. the Leasholder/tenant has received an invoice with the ground rent and is querying why he is charged with ground rent since he bought/paid for the lease extension.
The Lease says that the landlord may charge for ground rent.
So it is not clear if the Freeholder can charge for ground rent to the person that paid for the lease extension
Submitted: 3 years ago.
Category: Property Law
Expert:  cityguru replied 3 years ago.
thanks for your question. If the lease provided for a ground rent and the lease has been extend then the ground rent would continue. Of course an extension of a long lease has to be paid for as it is a valuable asset but part of the reason for its value is that it only require the payment of a ground rent instead of full rent for the premises. The lease prevails and if it specifies a ground rent then it has to be paid.
Customer: replied 3 years ago.

I believe the Lease that has been redrawn after the lease renewal states that the Freeholder may request for ground rent to be paid.


However this is the comments of the tenant


Ground Rent: I’m also not due to pay any more ground rent from 6 July 2012 as I renewed my lease with Paul (ground rent is now a peppercorn). Therefore for 2012, let’s pro-rate the £75 by half so £37.50 should be taken off 2012 and nothing should be charged for 2013.


 


Is this correct that he should not pay anymore? (even though in the lease it says that the Freeholder may exercise the request of ground rent?


What does peppercorn truly means?


 


 

Expert:  cityguru replied 3 years ago.
A peppercorn is just a notional rental and is not actually paid if it is a peppercorn. This is what used to be specified just to make sure a long lease what exactly that and to make sure there was no claim for adverse possession. Sometimes people refer to a pepper corn rent when it is £100 pa or something else fairly nominal. It is quite common in long leases. It is also common to provide the ground rent is only payable if demanded by freeholder. So it entirely depends upon what the current lease says.

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