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Hi Everyone, 



I was very interested in an auction property in Salford. I got the legal pack from the agent and arranged for a solicitor to go through it. The next day the solicitor told me that everything was fine with the property except for their being a rent charge on the property. I had no idea what he was talking about. He explained that the rent charge was a remnant of an agreement between Landowners and property developers from hundreds of years ago. Just like we have ground rent on leasehold property, a rent charge was a charge that the land owner put on any property that was built on their land. Apparently, this is still in use mainly in Manchester and Bristol.


I was worried that the rent charge would be a hefty sum that would eat into the amount I could charge any tenant and so diminish any profits I could make on the property. However, the some was only £4........... Per Year!! Happy that my the property was still financially viable, in my head I was excited and ready to make an offer. However,!! there was more. The solicitor continued to say that although a small amount of money, I needed to be careful. 


There is a scam going on with these Rent charges! Yes, a £4 rent charge! The scam is because it is such a small sum of money and paid every year rather than monthly, people forget to pay. Property owners that forget to pay the Rent Charge can find that the Rent Owner ( the person or company that owns the Rent Charge) is allowed to add a lease to their property in payment of their debt. Yes, even if this is just £4! Now, the scam is that to get the Lease off your freehold property, you have to pay whatever amount of money the rent owner suggests.


I have not bought this property yet. I wrote this post mainly to find out if the information that I have is correct or if the people that I have spoken to have exaggerated the consequences. Would be interested if anyone here has any experience or advice as to whether I should buy the property or not. I have found out that the property has had a lease put onto it. 


Removing the rent charge permanently is very easy and not too costly. But you have to know who the Rent Owner is. Even though I have tried to find out who this is, I have reached dead ends. 


Thanks in advance for your help





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  • 2 years later...

Hi Steve,

I didn't buy the property in the end. 

I would like to say that the property that I was looking at was for sale at auction. As part of my Due diligence I had a lawyer look into the property. They found the rent charge attached to the property, but couldn't find who the rent owner was. The property, maybe was not part of any scam, but I was unwilling to take the chance. That's what I would like to say, just because there is a scam to do with this subject, it doesnt mean that your property is a part of it. 

In theory it is very not very difficult to get out of the rent charge. You just have to find the rent owner and buy the rent charge from them. You just have to employ someone to find who they are. 

I hope you have more luck than I had. 

Chim Diwan






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I'm currently purchasing a property with a RentCharge. Its takes months to process which is annoying but needs to be done. You can buy a indemnity policy but in my view it didn't provide the necessary cover.I understand that if it still belongs to the council it is relatively inexpensive to sort. However they are sometimes sold on at a profit and may cost more to redeem the charge.....I think all RentCharges expire in 2037? 

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Hi Alja 

I am by no means an expert on this but what you say is exactly what I found. As I say it's a few pounds a year, so very inexpensive. But really depends who owns the charge and what they want to sell it for. 

As you said if it's the council that own it it's very simple to solve. However if you are unable to find the owner, then it becomes an issue. 





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Thanks for the reply everyone.

I got the property at auction so I couldn't really back out.

I have a feeling it is a bad company called morgoed estates who owns the rentcharge from looking at some articles. I have indemnity insurance to cover me in case of any issues but as stated above I am not sure how much I can rely on this. I do want to approach the company to buy the rentcharge but it will make my insurance invalid and then I am not sure if I will face any consequences from this company.

Any advice on how to handle this? 

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Just to add. My solicitor who I hired to buy the property (they are very good) suggested its better to rely on the indemnity as if I approach the owner of the rentcharge I put myself at risk of them asking for a lot of money and have no indemnity to back me up. I won't enjoy owning this property with this in the back of my mind though

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