Chief Rent Charges & Covenants

This depends upon the basis of why they think you need to change insurer.

It is not usual to find such a requirement in a Freehold house but I suppose that it could be present.

As to buying out the lease there are some rules that when the current owner sells you must be given first refusal and that if you are not, you can retrospectively enforce that right against the purchasor at the same terms as he bought the lease. Can't recall the exact details naw, take a look here:

and see if they can help.

Finally, 19 times the GR plus 200 legal fees is a reasonable price to buy out the leaseholder. ISTR that when I owned a leasehold house they offed to sell at 40 times (plus expenses).

tim

"tim (moved to sweden)" wrote

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They claim that they have an interest via a Covenant attached to the original Conveyance (44 years ago)!

Thanks, I'll take a look.

Yes, I accept that figure is reasonable, and at least one neighbour seems to see it as the best option.

Hmm, don't suppose this company's initials are M and E, in some order ?

I bought out my rentcharge to get just such a shower off my back. I had no idea if they were legally allowed to demand a change of insurance or not. I suspect not - they don't own anything. The rentcharge is a right in perpetuity to exact a fee, and would have been originally set up in favour of the landowner. Afaik, you own the land and the freehold. From this point of view, I cannot see how anyone can demand that you insure the property with them. They can have covenants which may restrict your ability to extend or convert the property, but that is not unusual.

My local MP was on the case of a few of these companies having had constituents complaining about what they saw as extortion. Sadly, she died just after the last election. I don't know whether her successor has taken up the reins. Someone should - it's a horrible little corner of the law that really ought be eliminated, or at least far better regulated. I was "fined" once for not replying to a rentcharge reminder that never arrived. Good, eh ?

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No, they are The "C" Group, and "C" Insurance Services.

See the site which "tim" recommended:

Some of the info is copyright, but it details government legislation which appears to prohibit insistence on the Rent Charge owner's choice of insurers, and which was apparently enacted on 28th February 2005.

"Freehold, subject to Chief", that despicable anomaly.

Our new energetic young MP is very interested in housing and Chief Rents, so maybe he will be helpful.

All comments appreciated.

I assumed you paid Chief Rent, which is rent payable on freehold properties.

You do !

Is this him:

359 If y9u're in the North West, this dept can apparently decide on the level of redemption fee, if you are being asked for too much: I still strongly doubt you can be forced to insure *your* property with a company not of your choosing. The management company that collected my chief rent did drop hints about insurance, but it read to me as if they were trying to drum up business. I have no doubt the insurers were closely related to the management co.

At one stage, I was offered redemption at about 18x the annual amount with no fees. Unfortunately, our rent was collected along with the next-door neighbours', and they couldn't be arsed. I eventually had to get the rents apportioned and then redeemed my own. It was much higher by then, and there was a fee. I still thought it was worth it. I hope to be moving house soon, and will absolutely not buy a property still subject to a charge if there is even the slightest hint that redemption won't be a simple send-a-cheque affair. Once bitten and all that.

John Laird wrote

Yes good detective work, and he mentioned the matter of rent charges in his maiden speech, as you observed!

I think I'm satisfied with the offer, but there remains the question as to whether we should have been given 'first refusal' from the original rent charge owner, but that may only apply to rented flats, from my reading.

The two companies rejoice in the same name, in our case!

I'm confused. What is a "Cheif Rent" then?

Sorry for any confusion. Chief Rent is paid on freehold properties, Ground Rent on leasehold (whether the house is owned outright or not). I think both can be described as rentcharges. Hope that's right. IANAL and all that !

Chief Rents only exist in some parts of the country, particularly the NW. Basically, the land was sold, subject to an income being produced, often in perpetuity. It probably looked a good deal at the time, but inflation has eroded the generated income significantly (the charge is fixed) - mine was £5.50/year on a big house. Management companies buy them in bulk. I suspect much of the attraction is in being able to exact fines or extra charges for non-payment or non-conformance, situations which are probably very easy to manufacture.

In message , John Laird writes

Is it not going to be a 999 year lease? There are lots of them around where the annual ground rent is 10 shillings or something like that. We had one, where the freeholder was the house next door and there was a covenant included in the lease that you weren't allowed to kill pigs in the back garden on a Sunday!