Rentcharges

A rentcharge was an annual sum paid by the owner of freehold land to the owner of the rentcharge. (In north-west England, they are often known as 'chief rents')

There are two categories of rentcharge: 'rentcharge' and 'estate rentcharges'.

A rentcharge is not the same as a ground rent. A ground rent is a rental payment due from the lessee to the lessor during the term of a long leasehold.

It wasn't necessary for the owner of the rentcharge to have any other legal interest in the land. Rentcharge provided a regular income for owners of land (the seller) after the land had been sold. Sometimes, the land was released without a capital sum as well. Once imposed, the rentcharge continued to bind all the land including one householder even after the land is later divided and sold off in plots.

Except for estate rentcharges, the creation of new rentcharges was abolished in 1977 and any existing rentcharges other than estate rentcharges will be extinguished on 22 August 2037. Such rent charges may also be redeemed (bought out) by the freeholder for approximately 16 times the annual amount of the charge.

Estate rentcharges serve one of two purposes. Either the rentcharge is used as a means to impose a duty on the freeholder to perform a covenant, or it is used to pay for services performed by the rentcharge owner for the provision of services, maintenance etc for the benefit of the land burdened by the rentcharge. Rentcharges will continue to exist as a means of paying for the upkeep of freehold estates.