What is a rentcharge?

A rentcharge is an annual sum paid by a freehold homeowner to a third party who normally has no other interest in the property. A rentcharge can also be referred to as a ‘chief rent’.

‘Rentowner’: a person who receives a rentcharge payment and has no other legal interests in the properties they collect from.

‘Freeholder’ or ‘homeowner’: a person who owns their own property and is responsible for paying the rentcharge. Most rentcharges have existed for many centuries, 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.

Since the Rentcharges Act 1977 no new income supporting rentcharges can be created.

‘Ground rent’ is a similar concept, but is only applicable to leasehold property and cannot be redeemed. See more information on ground rents and other charges in leasehold property.

What if my property is leasehold?

Rentcharges are only redeemable for freehold properties.

If you have a leasehold property, you cannot apply to redeem your ground rent.

If you are not sure what the tenure of your property is, you can contact HM Land Registry to find out more.

If you find that 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 Ministry of Housing, 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 4pm Monday to Friday).

Who has to pay the rentcharge?

Once it’s imposed, a rentcharge continues to bind all the land even if it’s later divided and sold off in plots.

The rentowner could require any one homeowner on the land to pay the entire rentcharge amount; they would then later collect the appropriate contributions from the other homeowners also living on the land.

However, in some cases, this homeowner wasn’t able to get money back from the other homeowners on the same plot of land, and was left out of pocket as a result.

Sometimes, a rentowner can agree to collect the various rentcharge portions individually from each homeowner on their land. This process is known as ‘apportionment’. It could be legal or informal. Most apportionments were agreed informally.

You can apply to buy out (‘redeem’) your rentcharge so that you no longer have to pay it (see How to redeem your rentcharge). If your house is one of a number of houses charged under one rentcharge, you may first need to get your share apportioned legally (see How to legally apportion your rentcharge).

How to redeem your rentcharge

Certain types of rentcharge are redeemable under the Rentcharges Act 1977. This means that you pay a single lump sum and after that no longer have to pay the rentcharge.

If you decide to apply to redeem your rentcharge under the Rentcharges Act 1977:

1. Download the application form below, fill it in and sign it. If there are joint owners, all of you should sign the application form. Application forms should not be signed by solicitors representing applicants. Return the form to: Rentcharges Unit, Ministry of Housing, Communities and Local Government, Ground11th Floor, Rosebrae1 Court,Mann WoodsideIsland, FerryLiverpool, Approach,L3 Birkenhead, Merseyside, CH41 6DU.1BP.

2. When you send the form, include a copy of the deed that created the rentcharge and a copy of the HM Land Registry register (if the property is registered). See an example of a HM Land Registry register. Please do not send any original documents to us. We only require photocopies. We cannot return any documents that you send to us.

3. The rentcharges team will examine your application and accompanying documents and will then contact the person you name as the rentowner and ask them to confirm ownership – only if we decide the rentcharge is of the redeemable type.

4. Once they have confirmed ownership of the rentcharge, the rentcharges team will calculate how much money you have to pay the rentowner to redeem the rentcharge. You will be sent payment instructions in the post. Payment must be made within 28 days of the date on the instructions.

5. You send payment to the rentowner. Please do not send any payment to our office as we cannot forward this on for you. Ask for the receipted form to be sent back to you. You should ensure that you are able to prove payment in the event of a receipt not being forthcoming, eg by producing bank statements, proof of postage, copy of the cheque. Email or write to the rentcharges team to inform us when you have sent the payment to the rentowner so we can document the file.

6. Once you get the receipted form back, please send it to the rentcharges team. If you do not receive the receipted form back from the rentowner, please let us know and we may chase this up for you or ask you to supply us with other proof of payment, for example, a copy of your bank statement showing the transaction debiting from your account within the 28 day timeframe.

7. Once the rentcharges team have received proof of payment in the form of the signed receipt or a copy of the transaction on a bank statement, we will then send you a certificate of redemption.

8. On receipt of your redemption certificate, you may wish to apply to HM Land Registry to have your property record updated and have the rentcharge entry removed from the Charges register. If you do not do so, the rentcharge will continue to show on your property Register of Title. The HM Land Registry property Title is a publicly available document, so it is better that it is up-to-date.

Application form to buy out (redeem) your rentcharge

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This file is in an OpenDocument format

What to do after you’ve redeemed your rentcharge

On receipt of your redemption certificate, you may wish to speak with HM Land Registry to have your property record updated and have the rentcharge entry removed from the charges register.

Please first call HM Land Registry to check the current fee for removing your rentcharge from the charges register. You may need to complete an application form and send a copy of the redemption certificate showing the rentcharge has been redeemed and is no longer payable as proof.

HM Land Registry can be contacted on 0300 006 0411.

How to legally apportion your rentcharge

You can apply for an ‘order of apportionment’ which legally separates your share of the rentcharge.

To apply to apportion your rentcharge:

1. Download the application form below, fill it in and sign it. If there are joint owners, all of you should sign. Return the form to: Rentcharges Unit, Ministry of Housing, Communities and Local Government, Ground11th Floor, Rosebrae1 Court,Mann WoodsideIsland, FerryLiverpool, Approach,L3 Birkenhead, Merseyside, CH41 6DU.1BP.

2. When you send the form to the MHCLG rentcharges team, include a copy of the deed that created the rentcharge, a copy of the deed that informally apportioned the rentcharge, and a copy of the HM Land Registry register (if the property is registered). See an example of a HM Land Registry register. Applications must be sent in by post – we cannot accept applications by email.

3. The rentcharges team will examine your application and accompanying documents.

4. If the Rentcharges team can apportion the rentcharge, they will then issue a draft order of apportionment to the rentowner and a copy will be issued to you. This will include the amount of rentcharge are liable to pay.

5. If the rentowner objects, the rentcharges team will consider this and adjust the amount if necessary. If we do this, we will send you a copy of the amended draft order.

6. If the rentcharge apportioned to your house is £5 or less per year, the rentowner can make the apportionment conditional on you buying out your share (‘redeeming’) of your rentcharge by paying them a lump sum. The rentcharges team won’t allow this if it would cause you financial hardship.

7. If the rentowner does not object and you do not withdraw your application after the draft order is amended, the rentcharges team will send you an order of apportionment. They will also send a copy to the rentowner.

Application form to apportion your rentcharge

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Apportioning ground rents on leasehold properties

If you pay a ground rent on a leasehold property that is also payable on other neighbouring properties, you can apply for an ‘order of apportionment’ that legally separates your share of the ground rent.

The process for applying is the same as for apportioning a rentcharge (above), but you should use this application form:

Application form to apportion your ground rent

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This file is in an OpenDocument format

Individual ground rents on leasehold houses cannot be redeemed by payment of a lump sum in the same way as rentcharges.

How much does it cost?

Most rentcharges have fewer than 60 years to run, and in such cases the cost of redemption is calculated according to a formula in the Rentcharges Act 1977. The cost of redemption can vary week by week.

You don’t have to pay any fee to the MHCLG rentcharges team for apportionment or redemption of a rentcharge. However, you may incur other costs, eg for obtaining a copy of your property deeds.

The Rentcharges Act 1977 provides that both the applicant and the rentowner must bear their own expenses of complying with the basic steps in the redemption procedure, including the completion and return of our statutory forms. This means rentowners are not entitled to charge you for supplying MHCLG with the information it requires.

What happens if you do not or cannot pay your rentcharge?

Should the homeowner fail to pay the rentcharge on time, the rentowner may not take enforcement action to recover the unpaid amount until it has served a notice on the homeowner demanding repayment. The notice must contain specified information such as the details of the rentowner, the amount that is owed and proof that the rentowner owns the title of the rentcharge.

If the homeowner does not comply with the terms of the notice, then the rentowner may then take formal action to recover the rentcharge. Rentowners may no longer use the provisions set out in Sections 121 and 122 of the Law of Property Act 1925 and must so rely on other measures (such as making a claim to the small claims court).

Contact

The rentcharges team is currently unable to accommodate visitors to our office. However, you can contact us by writing to:

Rentcharges Unit
Ministry of Housing, Communities and Local Government
Ground11th Floor, Rosebrae Court Floor
Woodside1 FerryMann Approach Island
Birkenhead Liverpool
Merseyside
CH41L3 6DU1BP

If you have any questions about the process to apportion or redeem your rentcharge, email the MHCLG rentcharges team at rentcharges@levellingup.gov.ukrentcharges@communities.gov.uk or call 0303 444 4560 or 0303 444 2901 (9am to 5pm Monday to Friday), or 0303 444 8095 (9am to 2pm Tuesday to Friday). Excluding Bank Holidays.