Chief Rent, also known as a rentcharge, is an annual sum payable on some freehold property in the United Kingdom.
It is particularly common in North West England, where the usual term is "chief rent", and in Bristol where the terminology is "rentcharge" (plural "rentscharge" or "rentcharges"). The term term "groundrent" is also used in many parts of the country.[1]
Chief rent should not be confused with a true 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.
Chief rent or rentcharge is a legal device which permitted an annual payment to be continually levied on a freehold property. It has been in existence since the 1290 Statute of Quia Emptores and was originally payable to the Lord of the Manor in perpetuity.
Rentcharges caught on in the late nineteenth and early twentieth centuries as a means of obtaining continuing income from a property after it had been sold. Rentcharges are payable to a third party, sometimes but not always the original builder.
The payments due were typically between £2 to £5 per annum, which are no longer a significant burden due to past inflation.
The Rentcharge Act 1977 barred the creation of new rentcharges from 1977 onwards, subject to very few exceptions.[2]
Old rentcharges can now be redeemed by making a lump sum payment under the Act.[3] Although many rent owners will try to make a private settlement with the rent payer,[4] the Act provides a formula which enables Department for Communities and Local Government (DCLG) 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. Any rentcharges still in existence in 2037 will be extinguished.[5]