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The issue arises as it had been common practice in England until June 2022 for flats – and occasionally houses – to be sold on the basis that the purchaser obtains a lease usually of 99 years or longer at a modest rent – described as a ground rent – and pays close to a freehold price for doing so. The Leasehold Reform (Ground Rent) Act ...
Perpetual lease, or lease in perpetuity – may be used only for a specified purpose. Freeholding lease – after approval is granted, convert a lease to freehold, and the lessee pays the purchase price in installments. This is an interim tenure; freehold title is not issued until all purchase costs have been paid.
As a legal term, ground rent specifically refers to regular payments made by a holder of a leasehold property to the freeholder or a superior leaseholder, as required under a lease. In this sense, a ground rent is created when a freehold piece of land is sold on a long lease or leases. [1] The ground rent provides an income for the landowner. [2]
Fee simple value (known in the UK as freehold) – The most complete ownership in real estate, subject in common law countries to the powers reserved to the state (taxation, escheat, eminent domain, and police power) Leased fee value – This is simply the fee simple interest encumbered by a lease. If the lease is at market rent, then the ...
A freehold, in common law jurisdictions or Commonwealth nations such as England and Wales, Australia, [1] Canada, Ireland, India and twenty states in the United States, is the common mode of ownership of real property, or land, [a] and all immovable structures attached to such land.
They are often known as chief rents in the north west of England but the term ground rent is used in many parts of the country to refer to either a rentcharge or a rent payable on leasehold land. [1] This is confusing because a true ground rent is a sum payable in relation to land held under a lease rather than freehold land.
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Following the Sportelli case [4] the Lands Tribunal adopted the so-called Sportelli formula to determine the rate, as follows.. q = r* + P – g* Where q is the deferment rate, [5] r* the real risk free rate, P the risk premium for the residential property market, and g* the real long-term growth in house prices.