Q&As

Where a transfer of part refers to a variable rentcharge to secure the payment of service charge and is supported by a Deed of Covenant and title restriction, does the 'freehold setup' remove the risk of enforcement of the draconian remedies under section 121 of the Law of Property Act? Further, can a fixed rentcharge of £1 p/a still be created under the Rent Charges Act 1977?

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Produced in partnership with Chris Bryden of 4 King’s Bench Walk
Published on LexisPSL on 04/01/2021

The following Property Q&A produced in partnership with Chris Bryden of 4 King’s Bench Walk provides comprehensive and up to date legal information covering:

  • Where a transfer of part refers to a variable rentcharge to secure the payment of service charge and is supported by a Deed of Covenant and title restriction, does the 'freehold setup' remove the risk of enforcement of the draconian remedies under section 121 of the Law of Property Act? Further, can a fixed rentcharge of £1 p/a still be created under the Rent Charges Act 1977?

Where a transfer of part refers to a variable rentcharge to secure the payment of service charge and is supported by a Deed of Covenant and title restriction, does the 'freehold setup' remove the risk of enforcement of the draconian remedies under section 121 of the Law of Property Act? Further, can a fixed rentcharge of £1 p/a still be created under the Rent Charges Act 1977?

A rentcharge is a method of securing a regular payment due to a third party in respect of land other than a payment by way of rent under a lease or of interest. Rentcharges historically were a mechanism enabling developers to continue to receive an income from land after it had been developed and sold and remains common in certain parts of the country including in the larger metropolises in the north and in the south-west. The Rentcharges Act 1977 (RA 1977) abolished new rentcharges, subject to limited exceptions, and provided for the extinguishment of existing rentcharges by 2037.

One of those exceptions is an estate rentcharge, being a rentcharge created for the purpose of:

  1. making covenants by the owner of the land enforceable by the rent owner (provided it is not more than a nominal amount), or

  2. of meeting or contributing to the provision of services, maintenance, repairs, insurance or for the benefit of the land

In this scenario

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