ESCALATING GROUND RENTS in RESIDENTIAL LEASES and CONSUMER PROTECTION

Abstract

Escalating ground rents in long residential leases (rents that double or are adjusted by reference to an index at regular intervals) have been described as onerous and can prevent property sales. This article considers whether they are legally enforceable under consumer protection legislation. Although litigation would be needed both to clarify the application of key provisions in the Consumer Rights Act 2015 to ground rent terms, and to take account of the individual lease terms, the article concludes that escalating ground rent provisions may not be binding where the leaseholder is a consumer. Further, if the rent provisions are held to be unfair it would mean that the leaseholder does not have to pay and can recover sums already paid. This conclusion would therefore also weaken the human rights arguments made against the government's plans to tackle problematic ground rents.