When the lease is first issued the rent that the leaseholder pays is generally calculated at 3% of the part owned/retained by the landlord.
For example if the property is worth £100,000 and the landlord’s share is 50%, the rent paid by the leaseholder will be 3% of the share held by the landlord.
The rent will be; 3% of £50,000 which equals £1,500 per year or £125 per month. The lease will also provide that the rent will increase every year typically by a specified percentage above the upward movement of the Retail Price Index (RPI).
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