Rent charge

A rentcharge is an annual sum paid by the owner of freehold land to a person who has no other legal interest in the land. Rentcharges have been in existence since the Statute of Quia Emptores in 1290. They are often known as "chief rents" in the north west of England but the term "groundrent" is used in many parts of the country to refer to either a rentcharge or a rent payable on leasehold land. This is confusing as a true groundrent is a sum payable in relation to land held under a lease. As a result, it is important to know the status of the land for which, an annual sum is paid.

The Statute of Quia Emptores (1290) was a statute passed by Edward I of England that prevented tenants from leasing their lands to others through subinfeudation. Pre-Quia Emptores tenants were able to lease their title to land such that the land-owning lords did not have any power over the sub-tenant to collect taxes. In its place, a system of substitution was used where the tenant's full interest would be transferred to the purchaser or donee.

Rentcharges provided a regular income for owners of land who were prepared to release land for development. Sometimes the land was released without a capital sum being paid with the rentcharge being the only payment. Once imposed, a rentcharge continues to bind all the land even when the land is later divided and sold off in plots. In such cases one householder can be made responsible for paying the whole rent. That person is then left to collect the appropriate portion from the other householders whose land is subject to the rentcharge.

Ground Rent is similar, but applicable to Leasehold property, not Freehold.