Q&As

In 1991, part of a freehold property which is subject to a rentcharge dating back to 1788 and has been subject to various transfers since 1788, was sold and the seller indemnified the purchaser of part against any rentcharges. That part is now being sold again. Should the seller seek an indemnity from their purchaser in respect of future payments of rentcharges, in order to ensure that the seller is protected from any future payments of rentcharges? The rentcharge owner is unknown.

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Produced in partnership with Kate Andrews of Hamlins
Published on LexisPSL on 30/01/2018

The following Property Q&A produced in partnership with Kate Andrews of Hamlins provides comprehensive and up to date legal information covering:

  • In 1991, part of a freehold property which is subject to a rentcharge dating back to 1788 and has been subject to various transfers since 1788, was sold and the seller indemnified the purchaser of part against any rentcharges. That part is now being sold again. Should the seller seek an indemnity from their purchaser in respect of future payments of rentcharges, in order to ensure that the seller is protected from any future payments of rentcharges? The rentcharge owner is unknown.
  • Chain of indemnity covenants
  • Practical points

It has been assumed that this Q&A refers to a rentcharge that is a positive covenant.

A rentcharge is defined as ‘an annual sum paid by a freeholder 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’. See government guidance for more information.

It follows, that requiring the freeholder to pay an annual sum will be a positive covenant listed on the property’s title. Positive covenants differ from restrictive covenants in that they require the purchaser to do something positive in relation to the land as opposed to refrain from committing an activity on the land.

Unlike restrictive covenants, positive covenants do not flow with the land and cannot bind successors-in-title. This makes it difficult to enforce on the buyer of the property unless there is a chain of indemnity.

Chain of indemnity cove

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