Where did that come from? - Rentcharges

[Laughingravy]

My house is sold STC and I had a quick update with my solicitor today. He went through where we are up to and the only thing he thought the buyers solicitor would come back on is a £3.50 annual Rentcharge. According to him easily sorted with a £200 indemnity. This was a bit of curve ball because I've had my house 35 years and at no point has this charge ever been mentioned. It wasn't mentioned when I bought it and since then no one has either written or door stepped me after their money. As a freehold property I'm surprised such things exist. And new ones were abolished under an act in 1977 with existing ones capped at 60 years. So in 2037 they will all be history. I think it'll be worth checking if all rentcharges have this 60 year countdown or if the clock started when the charge was put on the house. Because it would be a lot cheaper to give the buyers 14 years of payments and it may no longer apply anyway.

The only fly in the ointment is that unscrupulous companies have been quietly scooping up these rents and stitching up home owners by converting a Rentcharge into a lease. They don't legally have to remind you to pay and then can just drop this bomb shell on you. And finding out if a company has done this costs £60. I guess this is why the buyers will insist on the indemnity.

In the end £200 isn't the end of the world but it has come completely out of the blue. At least it shows my solicitor has actually read the deeds, my original ones clearly didn't.

Anyone else had issues with a rentcharge?

I've bought 14 houses and never heard of it before. You learn something new every day.

I have some familiarity with rent charges. They are more common in certain parts of the country than others. Some will run beyond 2037 and new ones can still be created in limited circumstances.

My sister had a rent charge to the local church on her freehold property. Very small amounts just like you. She put aside a small fund and that has resolved the issue. Lived there 10 years now no problems

I had an annual rent charge of £3 on a previous property. I was offered to buy the rent charge for £100.

We have one of these on our house which came up recently when selling it. It's meant to be collected by a house a few doors up, but they know nothing about it! In my 20 years here no one has ever mentioned it (it was on my original sale documents) so we've just had to get an indemnity policy for it, which is more expensive than the amount owed...

@Gudinne
Do you have any info for that? The YouGov site says the 1977 act put an end to it all in England and Wales and that 60 years is the limit.
I did ask my solicitor if it was worth tracking down the Rentowner but he said to leave sleeping dogs lie - and pay the £200! The only thing I'm not sure of is do all the rentcharges start from when the charge was added to the deeds - 1932 - or did the clock start in 1977 for every property with a charge.

@randomusernam
At least it sounds like it isn't the dreaded Chancel Repair Liability. From bits I've read the CofE mostly no longer pursue them as it isn't good PR nor very christian. One home owner got a bill for £100K and lost a court action leaving them with a massive bill and forced to sell up.

@Laughingravy the exceptions are set out in the 1977 Act itself. The clock started for most, not all, rent charges following the introduction of the 1977 Act. I expect that solicitors costs for getting the rent charge off your title will exceed £200, so if your buyer and their lender are comfortable proceeding with an indemnity policy then your solicitor's advice is sensible.

House I purchased this year has one so sellers bought a £200 indemnity at my solicitors request. Don't think it's been collected in decades (house is 1920s build).

@Gudinne
The exceptions do seem very specific and probably exceptional rare. The act does make it clear the 60 years counts down from the date the charge was placed - so for mine that was probably the early thirties. However:
'The extinguishment of a rentcharge under this section shall not affect the exercise by any person of any right or remedy for the recovery of any rent which accrues before the rentcharge is so extinguished.'

I'd much rather just pay the remaining £49 to the buyer, to cover then up til 2037 but that last bit is the sucker punch. I'd imagine the rentowner would pursue the current owner for all the back rent which would be at least 50 years worth if not more. Realistically my Rentcharge is exhausted and the chances of someone proving they are owed rent from at least 30 years ago is nigh impossible but the buyers are unlikely to settle for anything other than belt and braces. There goes another £200...

An update on this one. I had a long chat with my solicitor about this and it seems in respect of back rent the statute of limitations means the owner can only come after the last 6 years. So I suggested I pay the buyer that amount plus the ongoing rent til 2037- £3.50 per annum, so £70. He said that should work but he doubted the buyer's solicitors would go for it.

And as a result of his digging he's discovered that a company applied to the Land Registry in 2021 to change ownership of the rentcharge to them. I've had a look into this company and frankly they're shysters who scoop up lots of leases, and rent charges like this. Then they, by a number of legal but dubious methods, make a lot of money out of them for doing very little.

The document my solicitor sent over lists every house on my street, so they will own this charge on each one. The only good news is if they complete their land registry application they will have to contact every owner listed on it as it's a change of ownership. There is government scheme to allow you to buy out the rentcharge but it is quite a faff and no doubt this company will suggest helping you with that for a fee - doubtless a substantial one compared with the cost of sorting it yourself.