Can rentcharge owner demand interest on late payment?

[jarok]

If the rent charge (£12 p.a.)is overdue for several years,could I charge an interest, and how much?

[jeffrey]

If the rent charge (£12 p.a.)is overdue for several years,could I charge an interest, and how much?

1. Do you mean:
a. ground rent (reserved out of a leasehold property by a lease); or
b. a rentcharge (reserved out of a freehold property)?

2. Are you just the rent collector or also the freehold reversioner/rentcharge owner?

3. What does the Counterpart Lease/ Rentcharge Deed say about late payment?

4. Are you sure that the demands comply with s.166 of Commonhold and Leasehold Reform Act 2002, as to format?

5. You cannot sue for arrears >6 yrs old even if they are still owing. If you do, T can plead the Limitation Act 1980 (debts statute-barred if older).

[jarok]

Thanks Jeffrey,
to clarify:
I am an owner of RENTCHARGES-out of a freeholt property
re: Rentcharge deed, I'll have to find out
till this year,collection had been done by an appointed estate agent,but in some cases, they have not managed to collect the charge, hence a few would be over 6 years.

[Dave77]

Most importantly, you have not answered point 4.

[jarok]

Please excuse my ignorance, but does this act apply to rent charges? It seems to me, that it deals only with the Ground rents.
However 'the demand' gives relevant information and is always sent within 30 days prior the due date. Most freeholders pay on time,some 2-6 years later and some small number own 10 payments.

[MorgoedE]

1. Do you mean:
a. ground rent (reserved out of a leasehold property by a lease); or
b. a rentcharge (reserved out of a freehold property)?

2. Are you just the rent collector or also the freehold reversioner/rentcharge owner?

3. What does the Counterpart Lease/ Rentcharge Deed say about late payment?

4. Are you sure that the demands comply with s.166 of Commonhold and Leasehold Reform Act 2002, as to format?

5. You cannot sue for arrears >6 yrs old even if they are still owing. If you do, T can plead the Limitation Act 1980 (debts statute-barred if older).


Dear Jarok,

As a rep of the largest owners of rentcharges in the country I can say the above seems accurate with the exception of point 4. There is no need to comply with the s.166 CLRA requirements as they categorically do not apply to rentcharges. Do remember that a rentcharge is extinguished after 12 years if not paid! If you are considering selling your rentcharges, please bear us in mind. No portfolio is too small.

www.morgoedestates.com

[jarok]

Thanks MorgoedE. It's a reliave that I don't need to study s.166.I'll keep your address for future reference.
Hope Dave77 agrees with your statement.

[jeffrey]

I agree that s.166 applies ONLY to leaseholds' rent, not to rentcharges (which one normally encounters only in Manchester and Bristol).
If the deed says interest is due on late payments, it is. Otherwise, it's not UNLESS rent-owner gets a Court Order which can include a requirement to pay interest on top of debt.

[tenant29]

Jarok ,

If you are making a claim in the County Court including a claim for interest, then the amount should be calculated at 8%.

See hmcourts website .

[jarok]

Thank you all for your comments.Really helpful.