What Is Ground Rent?
Ground rent is a payment made by a leaseholder to the freeholder as part of the lease agreement.
It is essentially a rent for the land on which the property is built.
Ground rent does not relate to building maintenance.
What Are Service Charges?
Service charges are payments made by leaseholders to cover the cost of maintaining and managing shared areas of the building.
These funds are used for:
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Cleaning
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Repairs
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Insurance
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Maintenance
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Building safety
Key Differences
| Ground Rent | Service Charges |
|---|---|
| Paid to freeholder | Used for building maintenance |
| Fixed in lease | Based on annual budget |
| Not linked to services | Covers actual services provided |
Understanding the difference helps leaseholders better understand their financial obligations.
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