Ground-rent. in the law of England, is the rent which a person, who intends to build upon a piece of ground, pays to the landlord for the use of the ground for a certain specified term, usually ninety-nine years. The builder usually pays a certain annual sum by way of rent to the owner, who is thereafter called the ground-landlord, and then commences to build upon the land. The builder then lets the houses, and in doing so he of course includes in the rent which he puts upon each house a proportionate part of this ground-rent, which he himself is bound to pay to the ground-landlord, so that practically the tenant pays both the rent and the ground-rent, the latter being so called because it issues out of the ground, independently of what is built upon it. Ground-rents often form a safe investment for capital, because the security is good. This security consists in the ground-landlord being able, whenever his ground-rent is in arrear, to distraint all the goods and chattels he finds on the premises, to whomsoever they may belong; and as the ground-rent is generally a small sum, compared with the furniture of the tenant, he is always sure to recover its full amount. This power of distress exists (except in the case of lodgers) whether the tenant has paid his rent to his own landlord or not; but if at any time the tenant has been obliged to pay the ground-rent which his landlord ought to pay, he may deduct such sum from the next rent he pays, and set off the one against the other so far as it will go. At the end of the ninety-nine years, or whatever other term is fixed upon, the building becomes the property of the ground-landlord, for the interest of the builder (or mesne landlord as he is called) then expires by the effluxion of time. The value of the property thus reverting to the ground-landlord is often greatly increased by municipal improvements effected at the expense of the rates—i.e. at the expense of the occupier who pays the rates. The justice of this arrangement is open to question, and the case for a readjustment of rates is generally admitted to be a strong one. There are some politicians who announce that they will accept this reform as a mere instalment; their ultimate aim is to 'nationalise' the land by taxing ground-rents at the rate of twenty shillings in the pound.
Ground-rent corresponds to feu in Scotland, with this difference, that the feu-rent in the latter case lasts for ever, there being no definite term fixed for its ceasing.