Guidance

Practice guide 56: rentcharges

Updated 26 February 2024

Applies to England and Wales

Please note that HM Land Registry’s practice guides are aimed primarily at solicitors and other conveyancers. They often deal with complex matters and use legal terms.

1. Introduction

A rentcharge is a sum of money, usually payable annually, that is a charge on land. A rentcharge is usually created in a conveyance or transfer. The party selling the land reserves an annual rent payable to them and their successors in title, which is charged on the land sold.

Since 22 August 1977 the creation of most types of rentcharge has been prohibited. The main class of rentcharge excepted from the general prohibition is known as an estate rentcharge (section 2(4) of the Rentcharges Act 1977).

This can be a rentcharge of either:

• a nominal amount for the purpose of making covenants to be performed by the landowner enforceable by the rentowner against the current owner of the land

• a reasonable amount to meet or contribute towards the cost of the performance by the rentowner of covenants for the provision of services, maintenance or repair and insurance and other payments for the benefit of the land affected by the rentcharge

1.1 What this practice guide covers

This guide covers:

• how to apply for registration of estate rentcharges created out of registered land, and any associated rights of entry
• apportionments of noted and registered rentcharges (by statute and by deed)
• variation of the terms of a rentcharge or associated rights of entry
• determination of rentcharges

1.2 Definitions

In this guide the following terms will be used:

‘charged land’ - the freehold or leasehold estate subject to the rentcharge

‘landowner’ - the registered proprietor of the land subject to the rentcharge

‘rentowner’ - the owner of the rentcharge

‘estate rentcharge’ - a rentcharge permitted under section 2(4) of the Rentcharges Act 1977

2. How to apply to register a rentcharge created out of registered land

Where an estate rentcharge is created out of a registered estate on or after 13 October 2003 it must be registered to be effective at law (section 27 of the Land Registration Act 2002). Where a transfer of registered land or a prescribed clauses lease affecting registered land includes the creation of an estate rentcharge (and provided, in the case of a prescribed clauses lease, the rentcharge is referred to in clause LR12) we will automatically note the rentcharge in the register of the registered title of the charged land (rule 72(4), 72A(2) or 72C(2) of the Land Registration Rules 2003). However, to satisfy the registration requirements under section 27 and paragraph 7 of Schedule 2 to the Land Registration Act 2002 a specific application to register the rentcharge will always be required.

Where the rentcharge is created by a separate deed, we will not automatically make any entry in respect of the rentcharge unless an application to register or note the rentcharge is made.

For the avoidance of doubt separate applications to register the disposition of the land and the rentcharge should be made on form AP1.

A fee of £40 (£20 where the application is delivered by electronic means) is payable under Article 12 of the current fee order for the registration of a rentcharge created out of a registered estate, for each rentcharge.

An estate rentcharge is an interest capable of being protected by an official search with priority. Application should be made on form OS1 or via our electronic services as usual. If the rentcharge affects only part of a registered title a plan will be required, and application should be made on form OS2. The ‘purchase’ option should be used.

2.1 Creation of the rentcharge

From 22 August 1977 only rentcharges permitted by the Rentcharges Act 1977 can be created. A legal rentcharge must be created by way of a deed (section 52(1) of the Law of Property Act 1925), in possession and either perpetual or for a term of years absolute. In relation to rentcharges created out of registered land, a registered proprietor or a person entitled to be registered as proprietor has power to make a disposition of any kind permitted by the general law.

Although there is no statutory wording to create a rentcharge out of a registered title we will accept operative clauses along the following lines:

Example grant of a rentcharge

The [Transferee] grants out of the Property to [the Management Company] a perpetual rentcharge calculated and payable as specified in schedule 1.

Example reservation of a rentcharge

There is reserved to the [Transferor] a perpetual rentcharge calculated and payable as specified in schedule 1.

2.1.1 Statements indicating that a rentcharge is not an estate rentcharge

If a deed creating a rentcharge contains a statement or agreement that the rentcharge is not intended to be a rentcharge for the purposes of the Rentcharges Act 1977 we will return the deed for amendment.

As the Rentcharges Act 1977 contained a general prohibition against the creation of new rentcharges, with the exception of, among other things, estate rentcharges, if the rentcharge created in the deed is not an estate rentcharge, it will be void under section 2 of the Rentcharges Act 1977.

We will ask that the deed is amended to remove any uncertainty as to whether an estate rentcharge has been created or not.

2.2 How to complete form AP1

Panel 2: always enter the title number of the charged land. We will note the rentcharge in the register of the charged land (if it is not already noted) and also separately register the rentcharge under its own title number.

Panel 4: show the nature of application as “Register rentcharge”.

Panel 5: lodge a copy of the transfer or lease that created the rentcharge. Alternatively, if the transfer or lease has already been registered enter “See copy transfer/lease dated [insert date] registered under title [insert title]”.

Panel 6: enter the details of the person who is to be registered as proprietor of the rentcharge (the rentowner). If this is not the original person to whom the rentcharge was granted or reserved evidence of devolution of title to the rentcharge must be provided and listed in panel 5.

Panel 9: ensure you supply an address for service for the rentowner.

Panel 12: confirmation of identity is not required for an application which is simply to register a rentcharge. If the application is made at the same time as an application to register the transfer or lease out of which the rentcharge is granted or reserved, confirmation of identity will be required in respect of the parties to the transfer or lease – see practice guide 67: evidence of identity.

2.3 Documents required

The deed that created the rentcharge (or a certified copy) must be produced unless it has already been registered (for example on a new housing estate where the transfer of the house plot that grants a rentcharge has already been registered).

If the application is not to register the person to whom the rentcharge was originally granted, evidence of devolution of title to the person to be registered as proprietor of the rentcharge must be supplied.

2.4 Rentcharge affects part of a registered title or land transferred

Where a rentcharge only affects part of a registered title or part of land that is being transferred, a plan showing the extent of the land comprised in the rentcharge must be supplied and signed by the disponor (rule 213 of the Land Registration Rules 2003).

2.5 Registration of rentcharge at Companies House

Where a rentcharge is created and the landowner is a company registered at Companies House, the rentcharge may be registered at Companies House.

If a certificate of registration is not lodged with the application, we will make a note to the entry in the register stating that the title to the rentcharge may be subject to the provisions of section 859H of the Companies Act 2006 if and in so far as that section applies to the rentcharge (rule 111 of the Land Registration Rules 2003).

2.6 Other points

On a development please contact us to discuss whether the rentcharges are to be registered under one collective title or separately.

One AP1 can be used to register multiple rentcharges but a separate fee is payable for the registration of each rentcharge whether they are lodged for registration together or separately.

If the application is to register a new rentcharge and add it to an existing registered title, please include “Amalgamation with [insert title number]” in panel 4 of the AP1.

2.7 Action by HM Land Registry

When we receive an application we will allocate a new title number to register the rentcharge.

In many cases the rentcharge is already noted on the charged land (under rule 72(4) of the Land Registration Rules 2003); we will update the register entry of the rentcharge on the land charged to note the rentcharge title number. If it is not already noted, we may serve notice on the landowner of our intention to make an entry in respect of the rentcharge.

We will normally make an entry along the following lines in the register for the charged land:

A Transfer of the land in this title dated 1 January 2019 made between (1) A Housebuilder Limited and (2) Anne Other contains a grant of a rentcharge as therein mentioned.

The said Deed also contains covenants.

NOTE 1: Rentcharge registered under title number AB987654*

¬NOTE 2: Copy filed.

*If the rentcharge is registered.

On the rentcharge title we will make an entry giving details of the deed that created the rentcharge. As HM Land Registry is not in a position to determine whether a rentcharge is one permitted under the Rentcharges Act 1977 we will also make an entry along the following lines:

The title to this rentcharge is registered subject to its compliance with section 2(4) of the Rentcharges Act 1977.

Where multiple rentcharges are registered together under one title the details of the deeds creating the rentcharges will be entered in a schedule.

3. Right of entry

Rights of entry in this practice guide means remedies for the recovery of rentcharges sums due as opposed to an easement allowing a rentowner to enter onto the charged land to carry out their duties.

Rights of entry that are annexed to a legal rentcharge are a separate legal interest (section 1(2)(e) of the Law of Property Act 1925) and are also required to be completed by registration under section 27(2)(e) of the Land Registration Act 2002.

They generally allow the rentowner to enter into possession of the charged land in the event of non-payment of the rentcharge.

There are currently statutory remedies under section 121 of the Law of Property Act 1925 which include a right of entry. We will not refer to the statutory right of entry in the register but if the terms of a rentcharge created in a transfer or lease of registered land include express rights of entry we will automatically note these in the register for the charged land on registration of the transfer or lease (rule 72(4) and rule 72A (2) of the Land Registration Rules 2003) as follows:

The Transfer dated 1 January 2019 referred to above contains a right of entry that is annexed to the rentcharge reserved therein.

Where the rentcharge is registered under its own title number we will also make an entry along the following lines:

The Transfer dated 1 January 2019 referred to above also grants rights of entry, which are annexed to the registered rentcharge.

4. Apportionment of a rentcharge

The landowner of each part of the charged land is responsible for the whole sum unless the rentcharge is apportioned. Apportionment can be by deed or under an order for apportionment made under section 4 of the Rentcharges Act 1977. Apportionments can be legal (formal) or equitable (informal). For an apportionment by deed to be legal (that is, binding on the rentowner) the rentowner must be party to the apportionment.

We do not make an entry relating to informal apportionments and exonerations, unless you specifically request it.

4.1 Application to note a deed of apportionment or an order of apportionment

This section does not apply to an order of apportionment that is conditional on redemption of the rentcharge. Where an order of apportionment of a rentcharge has been made which is conditional on redemption, you should make an application to HM Land Registry for determination of the rentcharge when you have the certificate of redemption; see Determination of a rentcharge.

4.1.1 Documents required – rentcharge is registered

Your application must:

• be made on form AP1 (describe the nature of the application in panel 4 of the AP1 as ‘Apportionment of Rentcharge’)

• include the title number of the registered rentcharge and the charged land in panel 2

• include a certified copy of the order of apportionment given by the Secretary of State or the Welsh Ministers, or another government department, or

• include a certified copy of the deed of apportionment, and

• enclose the fee (see Fees)

4.1.2 Documents required – rentcharge is noted

Your application must:

• be made on form AN1

• include a certified copy of the order of apportionment given by the Secretary of State or the Welsh Ministers, or another government department, or

• include a certified copy of the deed of apportionment, and

• enclose the fee (see Fees)

4.1.3 Fees

For an application in form AP1, under Schedule 3, Part 1 (13) of the current Land Registration Fee Order, a fee of £20 where the application is submitted electronically or £40 where the application is submitted by any other permitted means is payable (see HM Land Registry: Registration Services fees).

For an application in form AN1, a fixed fee is payable under Schedule 3, Part 1(1)(b) of the Fee Order. Where the application is delivered by electronic means, the fee payable will be reduced by 50%. No fee is payable under Schedule 3, Part 1(1) if a form AN1 is lodged with a scale fee application or another application which attracts a fee under the same paragraph (see HM Land Registry: Registration Services fees).

See also Where a sale is contemplated.

4.2 Developing estates subject to a rentcharge created prior to plot sales

Sometimes a developing estate is made subject to a rentcharge affecting the whole development prior to plot sales, and it is apportioned upon each plot sale. To be a legal apportionment, the rentowner must agree to the apportionment.

The rentowner’s agreement to the apportionment can be shown by either their participation in the transfer of part of the freehold estate or an unequivocal prior consent to the apportionment (such as by way of an appropriate clause in the original rentcharge deed).

Where we are satisfied the apportionment is binding on all parties, we will note the rentcharge and the apportionment (if it is in the plot transfer) on the charged land on registration of the plot sale. If the rentcharge is registered, we will also note the apportionment on the rentcharge title provided the rentcharge title number is listed in the AP1 application form.

If the apportionment is in a separate deed (and not in the plot transfer) see Application to note a deed of apportionment or an order of apportionment.

5. Deeds of variation of a rentcharge

If the rentcharge is registered an application to enter the deed of variation should be made on form AP1, quoting the title number of the charged land and rentcharge title. The fee is £40 (£20 if delivered by electronic means). If the rentcharge is not registered but is noted in the register for the charged land, application should be made in form AN1. The fee is £40 (£20 if delivered by electronic means) but no fee is payable if the application is accompanied by a scale fee application (see HM Land Registry: Registration Services fees).

A deed that is expressed to vary the terms of the transfer that created the rentcharge should be made by all parties to the transfer (or their successors in title), including the transferor and rentowner.

A deed that is expressed to vary the terms of the rentcharge can be made between the rentowner and the landowner.

A deed of variation should not be used to determine a rentcharge or release a right of entry by way of altering the original terms of the deed creating the rentcharge. If a rentcharge or right of entry is no longer required a deed of release should be used.

If the rentcharge is not registered and ownership of it has passed since its original grant we will require evidence of the devolution of title to the rentowner.

6. Determination of a rentcharge

Application to close or partially close a registered rentcharge title must be made on form AP1 and supported by a certified copy of the deed of release or other evidence to satisfy the registrar that the rentcharge has determined. The rentcharge title will be closed or, where we have registered multiple rentcharges under one title, cancelled as to the relevant part. We will automatically cancel the notice of the rentcharge from the register of the charged land.

Application to cancel the notice of a rentcharge from the charged land where the rentcharge is not registered must be made on form CN1.

If we are not satisfied that the interest protected by the notice has come to an end, we may enter in the register details of the circumstances in which the applicant claims the interest has determined (rule 87(4) of the Land Registration Rules 2003).

A fixed fee is payable whether the rentcharge is noted or registered, unless the application is accompanied by a scale fee application; see Where a sale is contemplated.

6.1 Where a sale is contemplated

Where an application:

• to cancel notice of a rentcharge

• close or partly close a registered rentcharge title, or

• note an apportionment of a rentcharge is to be made in anticipation of a sale

it may be preferable for the purchaser to make the application at the same time as the application to register the transfer. This is because no fee is payable for these applications if that application is sent to HM Land Registry together with one attracting a scale fee under the current Land Registration Fee Order (see HM Land Registry: Registration Services fees).

6.2 Methods of determination

The most common methods of determination are by:

• deed

• a statutory certificate of redemption

• merger

• adverse possession

6.2.1 By deed

An application to cancel the notice of a rentcharge or close a registered rentcharge title must be supported by a certified copy of the deed of release executed by the rentowner.

Where a rentcharge is not registered and evidence of title to the rentcharge (starting with a good root of title that is at least 15 years old) is not provided, we may make a qualified entry under rule 87(4) of the Land Registration Rules 2003.

Where the applicant intends to release a rentcharge by a document that has not been executed as a deed we may make an entry relating to the claimed release:

By a [letter] dated 1 January 2019 Rentowner Limited acknowledged receipt of the sum of £100 being the agreed amount for the redemption of the rentcharge contained in the Conveyance dated 9 April 1923 referred to above.

6.2.2 By a statutory certificate of redemption

Details of the process of redeeming a rentcharge using the provisions of the Rentcharges Act 1977 are provided on GOV.UK.

Please provide a certified copy of the certificate of redemption given by the Secretary of State or the Welsh Ministers, or another government department. If the rentcharge was apportioned prior to redemption, please also provide a certified copy of the order of apportionment.

Please note that an estate rentcharge cannot be statutorily redeemed by the Secretary of State or Welsh Ministers (section 8(4) of the Rentcharges Act 1977).

6.2.3 Merger

For merger to take place, the rentcharge and the charged land must be held by the same party in the same capacity and the person holding the two estates must intend that merger takes place.

The necessary intention to merge must be established by the applicant applying for (one of the below):

• applying for cancellation of the notice of the rentcharge in form CN1

• applying for closure of the registered rentcharge title in form AP1

• making a request contained in a transfer or covering letter lodged with an AP1

6.2.4 Adverse possession

See section 12 of practice guide 4: adverse possession of registered land and section 8 of practice guide 5: adverse possession of (1) unregistered land and (2) registered land where a right to be registered was acquired before 13 October 2003.

7. Things to remember

We only provide factual information and impartial advice about our procedures. Read more about the advice we give.