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rentcharge


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N.

A periodic payment of money charged on land, but excluding rent payable under a lease or tenancy and sums payable as interest. Depending on the manner in which the rentcharge arose, it may be called a chief rent or fee farm rent, but the effect is similar. A rentcharge owned on terms equivalent to a fee simple absolute in possession or term of years absolute can be a legal interest in land, but one subsisting on other terms (e.g. for life) is an equitable interest, registrable as a general equitable charge. If the rent falls into arrears, the owner of the rentcharge may (on 40 days' arrears) enter the land and take its income until the debt is paid or lease the land to trustees who have powers to raise the money. On 21 days' arrears, he may enter the land and seize the debtor's goods as security for the rent (see distress). In general, a deed creating a rentcharge also reserves to its owner the right to forfeit the debtor's interest in the land if the rent is not paid. The Law of Property (Amendment) Act 1926 provides that freehold land subject to a rentcharge owner's right of forfeiture (a right of re-entry) can still qualify as a fee simple absolute in possession.

A rentcharge may also be secured on another rentcharge, rather than directly on land. For example, A grants a rentcharge (R1) over his land of £50 a year to B, who grants a rentcharge (R2) secured on R1 of £25 a year to C. If B is more than 21 days in arrear, C may appoint a receiver to collect the £50 from A and to pay C his £25 plus the expenses of the recovery, and account to B for any surplus.

The Rentcharges Act 1977 prohibits the creation of new rentcharges after 21 August 1977, except for (1) certain charges, usually in favour of the landowner's family, the effect of which is to make the land subject to a trust of land; and (2) estate rentcharges. The latter are usually reserved by a developer selling plots on an estate subject to covenants given by the purchasers to protect the character of the estate; they entitle the owner of the rentcharge to enforce the purchasers' covenants even after all the plots have been sold off.

Subjects: Law.


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