A rentcharge or chief rent is an annual sum paid by the owner of a freehold property to a third party. This third person is known as the rent owner. A rentcharge is different to ground rent, a ground rent being rent due on a leasehold property.
Rentcharges provide a regular income for owners of land who were prepared to release their land for development and have existed for centuries. Since the Rentcharges Act 1977 no new rentcharges can be created. The rentcharge will continue to be binding on your property unless you decide to redeem it.
Can you pay off the rentcharge so you own the land?
In some cases rentcharges can be redeemed under the Rentcharges Act 1977. You will be asked to pay a lump sum and once redeemed you will no longer have to make the annual payments. If your house is one of a number of houses who also have the rentcharge registered against their property, you may have to get it distributed between each property before you can redeem it.
It is important to note that in most cases you will still be subject to covenants, even if you claim the land. This is because they are binding on the land. The covenants are likely to state what you can or cannot do to the property or land. E.g. you cannot make structural alterations to the property without first submitting plans for approval by the rent owner or build on certain areas of the land without consent.
If you wish to discuss the purchase of a rentcharge or any other property matters, please contact our Conveyancing team on 0161 475 7676.