Page 13 - Oxted Local July 2025

In times gone by, rentcharges have been
a tricky area of the law to navigate and
archaic legislation has meant that they
can be a real sticking point when buying
and selling a property.
Rentcharges are a yearly payment made by
a freehold property owner to a third party
who holds no other stake in the property.
It’s a legal obligation attached to the land,
distinct from service charges or ground rent
typically linked to leasehold properties.
Under Section 121 of the Law of Property Act
1925 – yes 1925! – the remedies that were
previously available to rentcharge holders
could be a nightmare, as the legislation
gave rentcharge holders the right to take
possession of a property or even to lease a
property to a trustee to raise funds to cover
any arrears.
Rentcharges were affected by the
Rentcharges Act 1977, but unfortunately it
was not the answer many had hoped for
and issues persisted. However, there is now
a solution thanks to the Leasehold and
Freehold Reform Act 2024.
New law within the 2024 Act means that
the rentcharge owner cannot exercise
their enforcement under the 1925 Act,
unless the rentcharge owner has served
the homeowner with 30 days’ notice
demanding payment of the arrears and
the notice complies with a set of specific
requirements.
Moreover, the rentcharge owner no longer
has any remedies for recovering payment of
unpaid rentcharge on or after 27 November
2023. The rights to take possession/to grant
a lease have been removed.
Sadly, these changes do not extend to
estate rentcharges - paid by homeowners
to fund the upkeep of shared facilities
within a residential development. In these
cases, both the property owner and the
mortgage lender must still contend with the
strict enforcement rights available to the
rentcharge owner.
Whilst recent reforms are welcome, it’s
important to understand the implications
of rentcharges and seek advice if affected.
RENTCHARGES: AN
OLD FOE FINALLY
VANQUISHED?
The law firm for business and life
If you need assistance with
rentcharges, contact our Oxted
team on:
01883 779312
oxted@morrlaw.com
12 Station Road West, Oxted,
Surrey, RH8 9ES