Section 166 Notices: Why Your Ground Rent Invoice Isn’t Enough

I have lost count of how many times I have had this conversation now. A freeholder is chasing ground rent arrears, sometimes years of it, convinced they have a straightforward non-payment case. Then you ask to see the notice, and there isn’t one. What they have is an invoice.

Section 166 of the Commonhold and Leasehold Reform Act 2002 is blunt about the difference: no notice in the prescribed form, no liability to pay. Not “the paperwork is a bit off, just resend it.” Not liable, until it is fixed.

An invoice looks like it should do the job, and I understand why people assume it does. It states an amount, it states a date, it is addressed to the right person. Surely that is notice enough?

It isn’t. Section 166 has its own requirements, and they are specific. The notice has to follow the form set out in the Landlord and Tenant (Notice of Rent) (England) Regulations 2004, carry the prescribed notes for leaseholders, and set a payment date between 30 and 60 days after the notice is given, never earlier than the date the lease itself sets. An invoice, however clearly drafted, does none of that. It was never built to.

Get a detail wrong on the form and the leaseholder can simply ignore it. Lawfully, until you get it right.

Where I run into this most is with smaller freeholders and RMC directors managing things themselves, often on older leases that predate a lot of the current awareness around leasehold procedure. Nobody sat them down and explained that the invoice wasn’t doing the job it looked like it was doing.

Putting it right

Here is the reassuring part, worth saying plainly because arrears conversations tend to get tense fast: this is a switch, not a fine. No penalty for having got it wrong in the first place. Serve a compliant notice now, and liability starts running from the date on it.

Ground rent also escapes the 18 month rule that catches out service charges. Under section 19 of the Limitation Act 1980, you have six years from the date each payment fell due. Historic arrears are usually still there to recover, once the notice itself is right.

Worth checking your paperwork now, while it costs nothing but a bit of time. Cheaper than finding out mid-enforcement that the demand you have been relying on was never a notice at all.

Follow-up post: the second way section 166 notices fail, which is the address they go to.