TPI Leasehold Management Level 3 Practice Test 2025 – Complete Exam Prep

Ground rent refers to the periodic payment made by the leaseholder to the freeholder, typically structured as an annual fee. This arrangement is a fundamental aspect of leasehold agreements, where the leaseholder has the right to occupy a property for a set number of years, but the land itself remains owned by the freeholder. Ground rent is established at the outset of the lease and may be subject to specific terms regarding increases over time.

In leasehold situations, the leaseholder essentially pays for the right to use the land and property, while the freeholder retains ownership of the land, benefiting from the ground rent as a form of income. This payment does not cover any ownership rights apart from the temporary leasehold interest; therefore, it is distinct from any one-time payments like those made for lease acquisition or fees for maintenance of common areas, which have different purposes and structures in property management.