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Original poster

Freehold house and rent charge.

47 replies

angell84 · 26/10/2019 21:55

I am in the middle of buying a property. I am currently at the stage, where my solicitor is doig the searches.
She has just informed me that if I buy the house - I will have to pay a rent charge of 75 pounds per year. It is freehold. THTe rent charge was established way back in the 1800's. Merseyside

Has this happened to anyone.
Would you buy a house like that?

OP posts:
Lookingsparkly · 27/10/2019 00:58

Is it a rentcharge or estate rentcharge?

MinnieMountain · 27/10/2019 05:42

Not unusual for that age of property and part of England.

OnlyFoolsnMothers · 27/10/2019 05:43

Has it been increasing over the years?

DM1209 · 27/10/2019 05:47

There's a Restrictive Covenant on the property, its basically a promise that is attached to the property for as long as it exists and it is binding.

As others have suggested I'd find out about increases.

wowfudge · 27/10/2019 06:31

£75 sounds a lot. Most rentcharges are for modest amounts - are you sure it's not £7.50? If it's not an estate rentcharge, it will be abolished by 2037. You can also redeem it by buying it out.

Goinglive · 27/10/2019 07:50

Wowfudge is right. Its normally apportioned, so £75.00 may have been the fee for a whole load of houses at one point, with your liability being a small share of that.

Its very very common in Liverpool and Manchester. As PP said above they were abolished in 1977 and will expire in 1937

Your solicitor should be taking steps to ask the solicitor acting for the seller to redeem the charge and remove it. This can be done by applying to the government redemption scheme.

It's best to get it done that way, rather than leaving it as is, esp with the problems around Estate Rent charges at the moment

Slightlysurviving · 27/10/2019 07:57

We had one but it was £2 per year and hadn't been collected for 50 years as the parent company doesn't exist. We just didn't worry. Although £75 seems alot more significant.

Original poster
angell84 · 27/10/2019 10:09

I thought 75 pounds was alot. It definitely say 75 pounds in the document that she sent me. I will check with her and ask, is it 75 pounds payable by me , or by the whole estate. However on the document, it does look like it is payable just by me.

It is alot isn't it, I had heard of them being around 5 pounds.

OP posts:
wowfudge · 27/10/2019 10:28

You should ask her to clarify whether it is a rentcharge, also known as a chief rent, or an estate rentcharge if she hasn't done so already.

Withington · 27/10/2019 19:33

Its normally much lower pp are right. You could ask for the redemption charge (It think it's a standard 16x annual so would make sense at 7.50 but not necessarily at 75! We did this for our house; it doesnt actually save us anything in the long term as charge was so low but preferred having the house totally freehold.

wowfudge · 27/10/2019 19:36

Redeeming the rentcharge had no effect on the freehold status of your house Withington. It meant you no longer had the annual obligation to pay the rentcharge monies.

Original poster
angell84 · 27/10/2019 23:27

I looked at the document again. It definitely says 75 pounds for my house. Per year.

I will email her tomorrow.
God, house buying is a horrible process.

Just when I have one thing completed , some other issue will pop up that I didn't know about.

"Oh by the way, there is a rent charge of 75 pounds on that house per year"

OP posts:
AfterSomeAdvice1234 · 28/10/2019 08:00

We're in Liverpool and have the same thing, ours is referred to as chief rent and is related to ownership of land by the church. However ours is £1.65 per year and we were advised that was typical, so £75 does sound like a lot!

Rustyigloo · 28/10/2019 17:38

We have the same thing in Bristol. Mine is £10.50 a year.
I think I read somewhere that all chief rents will be cancelled within the next 20 years. I cant remember the exact date.

Rustyigloo · 28/10/2019 17:42

Just looked it up, it's 2037.

Original poster
angell84 · 28/10/2019 20:01

They shouldn't have a rent system from the 1800's , still in place at all. It is ludicrous

OP posts:
wowfudge · 29/10/2019 06:58

And that is one of the reasons it is being abolished. Did you get done answers from your solicitor?

wowfudge · 29/10/2019 06:58

Some not done

Original poster
angell84 · 29/10/2019 08:57

@wowfudge It should be abolished now. Why are they keeping it in place for another 20 years. Ridiculous.

No, she hasn't answered yet, thank you.

OP posts:
wowfudge · 29/10/2019 09:15

If it was £7.50 you'd think it was a minor inconvenience - most of them are relatively small amounts. Unravelling old property law matters is not as simple as doing it now: the Land Registration Act came in in the 1920s and there are still lots of properties which aren't registered.

Original poster
angell84 · 29/10/2019 10:11

@wowfudge thank you. I really think that the seller should be made to tell the buyer about this, before I went to conveyancing.

How is it fair that a hidden annual charge is sprung on me, after I pay solicitor's fees

OP posts:
Original poster
angell84 · 29/10/2019 10:17

And here is another reason why I am annoyed over this:

She has also said in the document that the seller's solicitors have not provided receipt of proof of previous payment of the rent charge,

and that if the rent charge has not been previously paid, it is possible that the rent owner could reclaim the house, or reclaim part of the house after I buy it. Or decide that they want to make it a leasehold.

And of course she wants me to pay an extra 150 pounds for an indemnity insurance to cover this.

My solicitor seem to keep finding things , - and making them sound really bad , and then wanting me to buy indemnity insurance.

So I am confused as to if anything is that seriously bad - or if she is just scaring me to pay out more money to the solicitors.

Were other people's conveyancing solicitors like this?

OP posts:
user1487194234 · 29/10/2019 20:38

If you are getting a mortgage the indemnity policy may well be required to satisfy the lender
The solicitor won't be making any money out of you getting an indemnity policy

OnlyFoolsnMothers · 29/10/2019 20:50

Can’t the sellers take out the indemnity insurance ?

Rustyigloo · 30/10/2019 08:03

Yes, if the sellers can't prove that they have paid the chief rent then surely it is their responsibility to cover the cost of the indemnity insurance? I'd certainly be suggesting that.
Surely they have a bank statement or something that could be used as proof. In fact, I bet if you did ask them to pay a receipt would magically appear.