Chief Rent

Chief Rent also known as a rentcharge is an annual sum payable on some freehold property common in North West England, but found throughout the UK.

Chief rent should not be confused with ground rent, confusingly also sometimes known as a rentcharge, which is a regular payment required under a lease from the owner of leasehold property, payable to the freeholder. Such rentcharges have been in existence since Statute of Quia Emptores in 1290 and were originally payable to the Lord of the Manor in perpetuity. The rentcharge can now be redeemed by making a lump sum payment under the Rentcharge Act 1977. ^[1] Although many rent owners will try to make a private settlement with the rent payer,^[2] the Act provides a formula which enables Department for Communities and Local Government (DCLG), following the closure of the Government Office for the North West, to calculate the redemption figure that the rent payer has to pay the rent owner in order to redeem their rentcharge. When the transaction has been completed DCLG, on behalf of the Secretary of State, issues a redemption certificate to the rent payer. Such rentcharges still in existence by 2037 will be extinguished.^[3]

A Rentcharge is a peculiarity of Conveyancing in Bristol (in Manchester these additional payments were known as Chief Rents) A Rentcharge was a device which permitted an annual payment to be continually levied on a freehold property in Bristol after it had been built. Rentscharge (plural) was a payment payable to a third party, sometimes but not always the original builder.

Rentscharge caught on in the late nineteenth and early twentieth centuries as, a ruse for income to be obtained from the property after it had been sold. Luckily, inflation has taken the sting out of the payment which typically were between £2 to £5 pounds per annum.

A UK law passed in 1977 allowed existing freehold owners to buy out these rents and barred the creation of new Rentscharge from 1977 onwards subject to very few exceptions.

References

1. ^ Anon. "Chief rent". Mortgage Glossary. http://www.home.co.uk/guides/mortgage_glossary.htm?chief. Retrieved 21 September 2009. 
2. ^ Gwynne, Andrew. [Andrew Gwynne MP "Residents Beware! Latest chief rent 'scam"]. Andrew Gwynne MP. Andrew Gwynne MP. Retrieved 21 September 2009. 
3. ^ Anon. "Rentcharges". Department for Communities and Local Government; what we do. Department for Communities and Local Government. http://www.communities.gov.uk/housing/homeownership/rentcharges/. Retrieved 15 August 2011.