A timely reminder about ‘chief rents’
THIS time of year is when ‘chief rents’ were collected. They are still fairly common in the north west – especially in Manchester and Salford - and often relate to Victorian or Edwardian housing like our typical terraced housing.
A chief rent is properly called a rent charge and is not the same as ground rent on leasehold properties.
If you are not sure if your property is freehold or leasehold, you can find out by looking at your property deeds or by visiting the HM Land Registry website.
A rent charge or chief rent is an annual sum paid by a freehold homeowner to a third party who normally has no other interest in the property.
Most rent charges have existed for many years, and are part of an historic system whereby land owners who released part of their land for development could charge a regular payment from the people living on it.
The rent charge or chief rent is typically a nominal amount of a few pounds each year.
It’s quite possible that nobody has tried to collect it for many years, or that it has been forgotten.
We get enquiries every now and then, which often relate to demands from companies who say they have acquired the right to collect the rent charge – as well as the right to grant permission for any extension, which they seek to enforce retrospectively.
Since the Rentcharges Act 1977 no new income supporting rent charges can be created.
‘Ground rent’ is a similar concept, but is only applicable to leasehold property and cannot be redeemed. You can buy (or redeem) your own rent charge.
Rent charges are only redeemable for freehold properties. If you have a leasehold property, you cannot apply to redeem your ground rent.
If your property is leasehold and you have any concerns, you may benefit from seeking free initial advice via the Leasehold Advisory Service’s (LEASE) website.
LEASE is a specialist advisory body funded by the Department for Communities and Local Government to provide assistance to leaseholders.
Alternatively, a telephone appointment can be booked to speak to one of LEASE’s legal advisers on 020 7832 2500 (9.30am to 3pm Monday to Friday).
You can apply to buy out (‘redeem’) your rent charge so that you no longer have to pay it.
If your house is one of a number of houses charged under one rent charge, you may first need to get your share apportioned legally.
Certain types of rent charge are redeemable under the Rent charges Act 1977.
This means that you pay a single lump sum and after that no longer have to pay the rent charge. The amount needed to redeem a chief rent is usually sixteen times the annual charge. You should also note that all chief rents are due to expire within sixty years of that Act – this is to say in 2037.
If you decide to apply to redeem your rent charge under the Rentcharges Act the best way of doing this is following the simple instructions on the government web site. (www.gov.uk/guidance/ rentcharges). You can also find the correct form there.
You will need a copy of the deeds to your property.
You should be able to get this from the solicitor you used when you bought your property; alongside the land register entry for the property.
The rent charges team will contact the person you name as the rent owner and ask them to confirm ownership.
Once they have confirmed, the rent charges team will tell you how much money you have to pay the rent owner to redeem the rent charge.
If the rentowner doesn’t confirm ownership, the rent charges team will advise you what to do.
You can get more advice from us by phoning 0300 330 1153 Monday to Friday 10 – 4pm.