Ground rent is an invention that started back in the time of the Romans and has been used throughout British history ever since. The history and origins of ground rent is an important and integral part of the history of property and also a fascinating read too.
Ground Rent in Roman Times
In Roman Times there was a great advance in civilisation and its understanding of business. It was in this time that people who owned land started lending it out to others who would work the land to make an income. In lending this land a contract or lease was written up in which the person leasing the land would agree to pay an annual ground rent to the land owner, this arrangement became enshrined in Roman Law.
In Roman times the ground rent payable depended on manner factors not used in today’s age, back then the rent depended on the land size, quality, numbers of slave workers and the stock kept on the land.
Ground Rent in the Dark Ages
After the Roman Empire collapsed, Europe became lost in the Dark Ages and not much is known about the use of ground rent in this time. The understanding is that ground rent, along with other business functions of the age ceased to exist as tribal chiefs reigned. These were dark and desperate times thatlasted a few hundred years before the growth of Feudalism in Medieval times from the 9th century.
Ground Rent in Medieval Times
After 1066 when William the Conqueror of Normandy (the Normans) invaded and took control of England he bought with him the Feudalism customs seen on the continent. To gain control of the lands he gave large areas of land to local Lords from his inner circle who would administer the area on his behalf. This included letting out the land and collecting ground rent taxes from the Serfs (workers) who were working on the land.
To ensure that everyone paid their dues, William the Conqueror had the Doomsday Book created in which every man, women, child, land and animal was accounted for so he could collect his ground rent and taxes.
This action brought much needed money to the Norman leaders, but there was one problem that caused troubles. Those leasing the land tended to sub-let the land to other tenants, something the land lords did not agree with as they could not collect ground rent taxes from those subletting.
Edward Longshanks, Edward I King of England, took the feudal work of the Normans and set about tirelessly building the administration of the country. Part of this administration saw Edward I review the feudal system and develop the QuiaEmptores act of 1290 (also known as the Statute ofWestminster III). This act was created to make whole the act of land lease by giving legislation to tenure of land and stopping sub-letting of land after tenure from a land owner.
Throughout the rest of medieval times the use of ground rent was wide spread and by the Tudor times the crown started increasing ground rent to bring in more taxes. This was never more so than during the time of King Henry VII. The crown was able to do this because people started to become more affluent through trade so the crown decided they wanted a larger cut.
It seems that people started becoming savvy to ground rent in Tudor times and a whole new style of building started being built to reduce ground rent charges. These buildings had a smaller lower floor and larger upper floor that would over hang the street below. The idea was born by the fact that ground rent now worked on floor space taken on the ground floor, so the larger upper floor gave more space but without the burden of higher ground rent charges.
Ground Rent in Victorian Times
By the Victorian period ground rent had become a part of English common law.
Victorian times saw more innovation in the use of ground rent and set the standards of what we see today in the use of ground rent.
Back in Victorian times the building business was not conducted in the same manner as today. Essentially land owners entered into a joint business venture with a building contractor where they would allow the builder to construct a specified number of properties. The land owner would then lease each building to the builder with an 80 year lease per property.
The builder would either sell on the property with an 80 lease of his own at an inflated price or let the property out for more money than the annual lease cost.
Ground Rent Today
Ground rent is still in use today and follows a similar vein as the Victorian method whereby any property leased for 21 years or more (usually 21, 99, 125 or 999 years) may be charged an annual ground rent fee to the land owner.
After initial acts in 1967 and then 1993 called the Lease Reform Act (1993 solely for flats) there were changes to the ground rent system to bring it in line with the present. These changes came in the form of the Commonhold and Leasehold Reform Act 2002 which under section 166 requires landlords to give prior notice of ground rent charges before payment is due. 167 of this act also denotes that landlords may not take control of the property from the Lessee unless the amount due is at least £350 and has been overdue for no less than three years.
While the above regulations are in force, ground rent is still a booming business and is applicable to any property where the purchaser is leasing the property, rather than owning the freehold.
Ground rent is not solely used in England today either, thanks to the growth of the English Empire you can find the use of ground rent in the United States of America and many countries of the commonwealth.
