Renters' Rights Act 2025, Phase 1 commencement
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England

Leasehold Property

Ground Rent Arrears UK

How freeholders recover ground rent arrears � s.166 LTA 2002 demand requirements, s.167 forfeiture restrictions, FTT determination, and practical recovery steps.

11 min readUpdated 7 June 2026Last reviewed: 17 May 2026ground rentleaseholdforfeitureLTA 2002

Ground Rent Act 2022 � pre-2022 vs post-2022 leases

The Leasehold Reform (Ground Rent) Act 2022 (LRGRA 2022) requires a peppercorn ground rent on all new regulated long leases granted from 30 June 2022. Charging above a peppercorn on a new regulated lease is a criminal offence. Existing pre-2022 leases are unaffected and ground rent remains payable. The Leasehold and Freehold Reform Act 2024 means any lease extension under LRHUDA 1993 must have a peppercorn ground rent for the extended term.

Section 166 LTA 2002 � formal demand before ground rent is due

Ground rent on a long residential lease is not legally due until the freeholder serves a prescribed notice under s.166 LTA 2002 (SI 2004/3096 form) not less than 30 days and not more than 60 days before the payment date. A defective or missing s.166 notice means the ground rent is not due for that year and cannot be recovered retrospectively. Many freeholders fail to serve valid notices � audit historical compliance carefully before claiming arrears.

  • No s.166 notice = no liability for that year � ground rent is not due without a valid prescribed demand
  • 30�60 day window is strict � a notice served outside this window makes the ground rent not due on that date
  • Electronic service is not permitted unless the lease expressly provides for it
  • Retrospective demands are not permitted � only future payment dates after a valid notice can be claimed

Section 167 LTA 2002 � restrictions on forfeiture and recovery steps

Section 167 LTA 2002 prohibits forfeiture for ground rent arrears unless both conditions are met: (i) arrears outstanding for at least 3 years; AND (ii) total of ground rent and administration charges exceeds �350. The First-Tier Tribunal (Property Chamber) must determine the amount due before forfeiture proceedings can be issued in the county court. Courts routinely grant relief from forfeiture on payment of arrears plus costs. A county court debt claim (avoiding the s.167 threshold) is often faster than forfeiture. A Land Registry unilateral notice (UN1) against the leaseholder's title creates practical pressure to pay on sale or remortgage.

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