Spotlight on rent charges in Manchester

Fridays-recommended Conveyancing in Manchester Solicitors are frequently faced with clients asking why they have to pay a small annual rent on freehold homes.

Why do the owners of some freeholds in and around Manchester discover they are receiving demands for what looks like an annual rent instalment?

It's usually the case that these are old charges imposed when land was sold for development in the eighteenth, nineteenth and early twentieth centuries. (This article generally refers to these 'old' rent charges, but they are sometimes also found on recently built properties, in conjunction with provisions for service charges for the maintenance of common estate areas. )

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A rent charge is small annual payment which is 'charged' on a freehold property, payable out of the property. The person who is entitled to receive the payment can take legal action against the current owner, whether this owner is aware of it or not.

These were imposed to provide a legal mechanism which enabled the original seller (and his successors) to enforce positive obligations (or covenants) against not only the original buyer, but any subsequent owners, to receive an ongoing income from the land. Generally, in English law, only negative or restrictive covenants can be enforced against subsequent owners, and then usually only by someone who owns land which can benefit from the covenant. In contrast, positive covenants can only be enforced against the original buyer. Where this is imposed on the first purchaser, the imposition enables its owner to enforce positive covenants against any successive owners, and without having to own any adjacent land.

This is not properly speaking a ‘rent’ and although it has some shared characteristics, as would be payable on a leasehold house, the property affected will have a freehold title. The amounts are usually very small, and often are no longer demanded or paid, but mere non-payment for a number of years does not mean that a new buyer cannot be forced to pay arrears.
In the Manchester area, such charges were usually imposed on large plots of land, such as original fields. The amount of the rent charge was fixed on the original sale, and cannot be altered. When individual houses were built and sold off, the charge would be apportioned between the sub-plots. This now means that the amount any individual property is liable for will be very small, and in practice these rents are now rarely paid or collected. Nevertheless their existence is recorded in the registered title, so they will still alarm buyers.

Covenants often require the house to be maintained in accordance with plans and drawings specified at the time the property was first built, so as to preserve the look of the area and ensure that any new buildings conform to the look of the adjoining properties on the area. It has to be said that it is uncommon for rent charge owners to take action to enforce these covenants, but some are known to be quite active in demanding payment, and may be prepared to take legal recovery action if not paid, so they can have a nuisance effect.

Conveyancing Solicitors in Manchester will check whether there is such a rent charge on a property, and to advise more fully on its effect. They are rarely encountered in other parts of the country, so Solicitors who do not practice in the Manchester area may be unfamiliar with them.
Manchester Conveyancing Solicitors acting on behalf of purchasers can check if any payments have been made or demanded.

It is possible to buy out these charges, but this can be difficult where it is not known who is now entitled to receive the payments. Also it is rarely considered worth the expense. The statutory right of buyout does not apply, and statutory provisions relating to leasehold property and rents do not generally apply.

There are several other legal points which may arise during property transactions in Manchester and instructing a Solicitor with local knowledge is important to ensure that nothing is overlooked.
If you require Conveyancing in Manchester for your sale or purchase transaction, contact Fridaysmove at 0330 660 0286.