Rentcharges: overview

by Practical Law Property

A note that provides an overview of the law governing rentcharges in England and Wales, an area often misunderstood by practitioners. This note provides an overview of what a rentcharge is, its historical use, and the significant impact of the Rentcharges Act 1977 (RA 1977), which prohibited the creation of most new rentcharges. The note focuses on the important exception of estate rentcharges, which can still be created and are commonly used to enforce positive covenants or secure service charge payments on modern freehold estates. It also offers practical guidance on identifying different types of rentcharges, registration requirements and methods of termination. The note explores the enforcement remedies available to rent owners, particularly the draconian statutory powers under section 121 of the Law of Property Act 1925 (LPA 1925) highlighted in Roberts v Lawton and others [2016] UKUT 395 (TCC). This details the significant recent reforms in the Leasehold and Freehold Reform Act 2024 (LFRA 2024), which introduced "regulated rentcharges" and abolished section 121 remedies for them. It explains the practical implications for conveyancers, buyers, and lenders, particularly as these remedies still apply to estate rentcharges.