What rentcharges are, how to apply to pay only your share of ('apportion') a rentcharge, or apply to buy out ('redeem') your rentchange.
A rentcharge is not the same as ground rent on leasehold properties. Find out more about leasehold ground rents.
If you are not sure if your property is freehold or leasehold, you can find out by looking at your property deeds or by visiting the HM Land Registry website.
What is a rentcharge?
A rentcharge is an annual sum paid by a freehold homeowner to a third party who normally has no other interest in the property. A rentcharge can also be referred to as a ‘chief rent’.
‘Rentowner’: a person who receives a rentcharge payment and has no other legal interests in the properties they collect from.
‘Freeholder’ or ‘homeowner’: a person who owns their own property and is responsible for paying the rentcharge. Most rentcharges have existed for many centuries, and are part of an historic system whereby land owners who released part of their land for development could charge a regular payment from the people living on it.
Since the Rentcharges Act 1977 no new income supporting rentcharges can be created.
‘Ground rent’ is a similar concept, but is only applicable to leasehold property and cannot be redeemed. See more information on ground rents and other charges in leasehold property.
What if my property is leasehold?
Rentcharges are only redeemable for freehold properties.
If you have a leasehold property, you cannot apply to redeem your ground rent.
If you are not sure what the tenure of your property is, you can contact the HM Land Registry to find out more.
If you find that your property is leasehold and you have any concerns, you may benefit from seeking free initial advice via the Leasehold Advisory Service’s (LEASE) website. LEASE is a specialist advisory body funded by the Ministry of Housing, Communities and Local Government to provide assistance to leaseholders.
Alternatively, a telephone appointment can be booked to speak to one of LEASE’s legal advisers on 020 7832 2500 (9.30am to 3pm Monday to Friday).
Who has to pay the rentcharge?
Once it’s imposed, a rentcharge continues to bind all the land even if it’s later divided and sold off in plots.
The rentowner could require any one homeowner on the land to pay the entire rentcharge amount; they would then later collect the appropriate contributions from the other homeowners also living on the land.
However, in some cases, this homeowner wasn’t able to get money back from the other homeowners on the same plot of land, and was left out of pocket as a result.
Sometimes, a rentowner can agree to collect the various rentcharge portions individually from each homeowner on their land. This process is known as ‘apportionment’. It could be legal or informal. Most apportionments were agreed informally.
You can apply to buy out (‘redeem’) your rentcharge so that you no longer have to pay it (see ‘How to redeem your rentcharge’ below). If your house is one of a number of houses charged under one rentcharge, you may first need to get your share apportioned legally (see ‘How to legally apportion your rentcharge’ below).
How to redeem your rentcharge
Certain types of rentcharge are redeemable under the Rentcharges Act 1977. This means that you pay a single lump sum and after that no longer have to pay the rentcharge.
If you decide to apply to redeem your rentcharge under the Rentcharges Act 1977:
- Download the application form below, fill it in and sign it. Return the form to: Rentcharges Unit, Ministry of Housing, Communities and Local Government, Ground Floor, Rosebrae Court, Woodside Ferry Approach, Birkenhead, Merseyside, CH41 6DU.
- When you send the form, include a copy of the deed that created the rentcharge and a copy of the HM Land Registry register (if the property is registered). See an example of a HM Land Registry register.
- The rentcharges team will contact the person you name as the rentowner and ask them to confirm ownership.
- Once they have confirmed, the rentcharges team will tell you how much money you have to pay the rentowner to redeem the rentcharge. If the rentowner doesn’t confirm ownership, the rentcharges team will advise you what to do.
- You send payment to the rentowner. Ask for the receipted form to be sent back to you.
- Once you get the form back, send it to the rentcharges team.
- They will then send you a certificate of redemption.
What to do after you’ve redeemed your rentcharge
On receipt of your redemption certificate, you may wish to speak with the HM Land Registry to have your property record updated and have the rentcharge entry removed from the charges register.
Please first call the HM Land Registry to check the current fee for removing your property from the charges register. You may need to complete an application form and must also send a copy of the redemption certificate showing the rentcharge has been redeemed and is no longer payable as proof.
The HM Land Registry can be contacted on 0300 006 0411.
How to legally apportion your rentcharge
You can apply for an ‘order of apportionment’ which legally separates your share of the rentcharge.
To apply to apportion your rentcharge:
- Download the application form below, fill it in and sign it. If there are joint owners, all of you should sign. Return the form to: Rentcharges Unit, Ministry of Housing, Communities and Local Government, Ground Floor, Rosebrae Court, Woodside Ferry Approach, Birkenhead, Merseyside, CH41 6DU.
- When you send the form to the MHCLG rentcharges team, include a copy of the deed that created the rentcharge and a copy of the HM Land Registry register (if the property is registered). See an example of a HM Land Registry register.
- The rentcharges team will contact the person you name as the rentowner and tell them that you have applied.
- The rentcharges team will then issue a draft order of apportionment. This will include the amount of rentcharge you are paying.
- If the rentowner objects, the rentcharges team will consider this and adjust the amount if necessary. If they do this, they’ll send you a copy of the amended draft order.
- If the rentcharge apportioned to your house is £5 or less per year, the rentowner can ask that you instead have to buy out your share (‘redeem’) your rentcharge by paying them a lump sum. The rentcharges team won’t allow this if it would cause you financial hardship.
- If the rentowner does not object or you don’t withdraw your application after the draft order is amended, the rentcharges team will send you an order of apportionment. They will also send a copy to the rentowner and all the other householders who pay the rentcharge.
Apportioning ground rents on leasehold houses
If you pay a ground rent on a leasehold house that is also payable on other neighbouring properties, you can apply for an ‘order of apportionment’ that legally separates your share of the ground rent.
The process for applying is the same as for apportioning a rentcharge (above), but you should use this application form:
Individual ground rents on leasehold houses cannot be redeemed by payment of a lump sum in the same way as rentcharges.
How much does it cost?
Most rentcharges have fewer than 60 years to run, and in such cases the cost of redemption is, at present, about 16 times the annual amount of the rentcharge.
You don’t have to pay any fee to the MHCLG rentcharges team for apportionment or redemption of a rentcharge. However, you may have to pay other costs, like getting a copy of your house deeds.
If you intend to visit the office for any reason please either telephone or email to make an appointment beforehand to avoid disappointment.
Ministry of Housing, Communities and Local Government
Ground Floor, Rosebrae Court
Woodside Ferry Approach
If you have any questions about the process to apportion or redeem your rentcharge, email the MHCLG rentcharges team at firstname.lastname@example.org or call 0303 444 8095 or 0303 444 4560.