GROUND RENT. The accepted meaning of ground rent is the rent at which land is let for the purpose of improvement by building, i.e., a rent charged in respect of the land only and not in respect of the buildings to be placed thereon. It thus conveys the idea of something less than a rack rent (see RENT) ; and ac cordingly, if a vendor described property as property for which he paid a "ground rent," without any further explanation of the term, a purchaser would not be obliged to accept the property if it turned out to be held at a rack rent. But while a rack rent is generally higher in amount than a ground rent, the latter is us ually better secured, as it carries with it the reversionary interest in buildings and improvements put on the ground after the date at which the ground rent was fixed, and accordingly ground rents have been held a good investment (see TRUST AND TRUSTEES) . A devise of "ground rent" carries not only the rent but the reversion. Where a tenant is compelled, in order to protect himself in the enjoyment of the land in respect of which his rent is payable, to pay ground rent to a superior landlord (who is of course in a position to distrain on him for it), he is considered as having been authorized by his immediate landlord to apply his rent, due or accruing due, in this manner, and the payment of the ground rent will be held to be payment of the rent itself or part of it. A lodger should make any payment of this character under the Law of Distress Amendment Act 1908 (s. 3; and see RENT). Ground rents are apportionable (see APPORTIONMENT).
In Scots law, the term "ground rent" is sometimes used in the above sense in relation to the rent stipulated for on building leases, but it has no technical significance. Owing to the limited nature of leasehold rights, builders and other improvers of land in Scot land have generally insisted upon acquiring the right of property in the land taken by them in return for an annual payment economically equivalent to a ground rent, but legally distinct from rent. Where the land in question is not subject to prohibition against subinfeudation this has generally been done by a subfeu, the reddendo or feu-duty of which is the economic equivalent of ground rent. Where subinfeudation is prohibited the procedure in modern times has been by way of Contract of Ground Annual, a complex conveyancing device whereby the builder becomes pro prietor, of and under the former feudal superior, in return for a payment to the former vassal of a ground annual economically equivalent, alone or in conjunction with an existing feu-duty, to a ground rent.
"Ground rents" in the English sense do not seem to be in general use in the United States, but they obtain in Pennsylvania. They are rent services and not rent charges—the statute Quia Emptores never having been in force in Pennsylvania. Ground rents are also found in Maryland and to a lesser extent in Ohio.
A ground rent being a freehold estate, created by deed and per petual in duration, no presumption could, at common law, arise from lapse of time, that it had been released. But now, by statute (Act of April 27, 1855, s. 7), a presumption of release or extinguishment is created where no payment, claim or demand has been made for the rent, nor any declaration or acknowledg ment of its existence made or given by the owner of the premises subject to it, for the period of 21 years. Ground rents were formerly irredeemable after a certain time. But the creation of irredeemable ground rents is now forbidden (Pennsylvania Act 7 Assembly, April 22, 185o).