UK residential or commercial property law is among the most complex on the planet.

Amongst its lots of instruments is the ground lease.

Ground leases are granted by the freeholder of land and buildings to a leaseholder, normally with a long lease.

This is a semi-permanent arrangement as the lease usually lasts for 125 years or longer and will typically remain in place till the leaseholder decides to end the lease, offer up and vacate.

If the lease runs out, then the land and building( s) are transferred back to the freeholder, unless an extension is given.

The leaseholder will pay both an upfront payment to the freeholder and ground rent, which is normally paid regular monthly or yearly.

The leaseholder generally holds absolute control of the residential or commercial property within limited covenants and easements defined in the lease contract.

Ground lease is charged applied to the land itself, which remains under freehold ownership throughout the long lease.

Essentially then, industrial residential or commercial property ownership through leasehold includes both an upfront payment in-line with the residential or commercial property's market price in combination with yearly or regular monthly ground rent.

A Brief History of Ground Leases

Ground leases are an olden feature of UK residential or commercial property and land law and though they have actually undergone several reforms in the Landlord and Tenant Act 1954 and Housing and Urban Development Act 1993, they remain essentially similar to their medieval origins.

Ground leases came about when much of the UK was owned by 'Landed Estates'. Feudal land barons, knights, earls, viscounts and other members of the British aristocracy owned the huge bulk - or all - of the land. The Crown Estate, City of London, Church Commissioners and other major institutions, for instance, still own significant portions of London including Regent Street and considerable portions of the monetary district. These areas will all undergo ground leases.

But, any freeholder of land or residential or commercial property can enter into a leasehold relationship with occupants and this is a very typical form of residential or commercial property ownership.

Ground leasing enables the freeholder to permit development and utilize on their land without transferring ownership of the land totally.

There is substantial utilize in industrial ground leasing financial investment, where freehold land is and offered on a leasehold basis with payable ground lease, and the present market is burgeoning.

There are 3 types of generic residential or commercial property ownership and occupation in the UK