Ground rent vs service charge: what's the difference and what can I challenge?

England and Wales · Law checked 24 October 2026 · Not legal advice

Ground rent is a fixed rent you pay the landlord under your lease. It isn't payment for any service. A service charge is a variable charge for the costs of services, repairs, insurance and management. The two are often billed together, but different rules apply.

What you can challenge

• Service charges must be reasonable (s.19) and can be challenged at the tribunal.
• Ground rent is set by the lease. The tribunal can't reduce it for being "unreasonable". Your main options are checking it has been demanded properly, a statutory lease extension (which gives a peppercorn ground rent), or buying the freehold.

Ground rent must be demanded properly: section 166

For a long lease of a flat, ground rent isn't payable unless the landlord serves a notice in the prescribed form (section 166, Commonhold and Leasehold Reform Act 2002). The payment date must be 30 to 60 days after the notice and not before the date set in the lease. A service charge demand needs its own summary of rights.

The Ground Rent Act 2022

For most new long residential leases granted on or after 30 June 2022 (1 April 2023 for retirement properties), ground rent is limited to a peppercorn, in effect nothing. Landlords can't charge an administration fee for collecting a peppercorn rent. The Act doesn't change ground rents under existing leases, and it doesn't limit service charges.

The proposed £250 cap: not law yet

The government has published a draft Commonhold and Leasehold Reform Bill that would cap existing ground rents at £250 a year, falling to a peppercorn after 40 years. As of October 2026 it is still a draft: it has not been passed and is not in force.

Arrears

The forfeiture limits (more than £350, or unpaid for more than three years) cover ground rent, service charges and administration charges together. See arrears and forfeiture.

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