Chief rent question.

joeyjac

Hi,

We recently bought a freehold house that is subject to an annual chief rent of £10. I believe this is due to the lord that allowed use of the land back in the 70's.

I have just received a bill from the company that deals with this rent stating that I owe £10 which I was expecting. Thing is at the bottom of this letter it says I can redeem the chief rent for £250. Will this mean that i will no longer need to pay the £10 every year?

Also we are about to start building work, including knocking down internal walls and adding a conservatory, I believe I have to get permission from Simarc (the company who collects the chief rent) to carry out alterations? I'm guessing they will charge me for this permission?

What I'm wondering is would it be worth my while to pay the £250 and will this avoid the need for permission when doing the alterations?

Hoping someone can advise me as until recently I had no idea there was such a thing as rent on a freehold property.

Jo

joeyjac

Can anyone help please??

Jo x

daveyjp

Pay £250 and never pay £10 again.

More here:

http://www.gos.gov.uk/gonw/PeopleSustainableCommunities/Housing/Rentcharges/

lizlynbury

ask your solicitor if this payment removes restrictive covenants, you may find you will still have to pay for permission from simarc

Platti

I've just had an offer to buy out my Chief rent so thought I'd give this thread a bump. Is it worth buying ??
Also could I retain the right to carry on claiming the £4 a year when I move, I'm guessing not !

matto

Just been looking at this myself after receiving my rentcharge bill for the last 10 years. I'd thought they'd given up with it as its only £2 a year.

Anyway, there is a statutory scheme to redeem certain rentcharges under the Rentcharges Act 1977. I believe this covers Chief Rent and Fee Farm Rental but may also be known as groundrent in relation to freehold properties only. If getting hold of the deeds would involve significant expense then you should look further into this. This will most likely be the case if your property isn't registered with the Land Registry and you don't already have a copy of the deeds. There is a warning on the website that redemption is not available for all rentcharges. AFAIK this information is applicable only to freeholds and not leaseholds.

Under the Rentcharges Act, most freehold rentcharges will cease in 2037.

The current cost to redeem seems to be be about 15 x the annual payment. If the property is regsitered then the redemption would also have to be recorded with The Land Registry and that would cost £40. You will probably also have to get copies of the deeds from the Land Registry. For £3 you should be able to get copies of the deeds of regsitered properties from the Land registry website. Its £6/£10 to request official copies from the Land Registry via their forms http://www.landregistry.gov.uk/wps/portal/Property_Search.

As far as I can work out that's it costs wise. No solicitor required and you don't have to pay the other parties costs.

If you buyout the Chief Rent (rather than redeem it) then you probably would retain the right to charge whoever bought your house but you may decide it's not worth it of course.

Personally, I've decided I will redeem the rentcharge as although it will cost more than the 28 years left, I think it will be helpful when it comes to selling to be able to show via the land registry records that the rent is redeemed. I know when I bought my solicitor made sure the payments were up to date.

The redemption scheme is administered by the Government Office for the North West for England and by the Welsh Assembly for Wales.

All the redemption forms seem to be available on their (GONW) website (and the Land Registry have a leaflet about registering the redemption on their website).

Rentcharge Redemption Leaflet

http://www.gos.gov.uk/497468/docs/511756/RedemptionRentcharges

Rentcharge Redemption Process / FAQs

http://www.gos.gov.uk/497468/docs/511756/758000

Rentcharge Redemption Form

http://www.gos.gov.uk/497468/docs/511756/redemptionrentcharge.doc

Land registry leaflet

http://www1.landregistry.gov.uk/assets/library/documents/lrpg056.pdf

Land Registry Form

http://www1.landregistry.gov.uk/assets/library/documents/AP1.pdf

matto

I'm considering printing off all the information and hawking it round my neighbours just to make sure they aren't conned into buying out the rent for £100's.

Platti

Thanks Matto, thats been very helpful.

peter_m14

Following the closure of the Government Office for the North West, the Department for Communities and Local Government created a new smaller National Rentcharges Unit. They can be contacted on [EMAIL="rentcharges@communities@gsi.gov.uk"]rentcharges@communities@gsi.gov.uk[/EMAIL]

hazyjo

Old thread. Ignore. Why's this bod dragging up old threads...

Jx