To date, rentcharge payers have had the benefit of a free of charge Government service when seeking to buy-out rentcharges. The formula for redemption is reasonably complex one which proceeds on an assumption of 2.5% yield across the relevant period. DCLG now proposes to cease to provide that service since it says 'the costs associated with the ongoing provision of this service by the Government cannot be justified when compares with the amounts being paid for actual redemption', which average at £156. Given the inherent difficulties and costs involved where parties attempt to redeem a charge by agreement, current payers would be well advised to take advantage of this service before it disappears completely in three months' time. Responses are requested by 4 November 2015.
Parties seeking to redeem a charge on an informal basis will usually take steps along the following lines: • The rent payer goes directly to the rent owner and asks them to agree to redemption of the rentcharge. • A redemption figure is agreed by both sides • The rent payer pays the redemption price to the rent owner The rent owner’s legal representatives will then produce a ‘deed of release’ releasing the land from the rentcharge • The rent payer pays the rent owner’s legal costs • The rent payer then sends a copy of the deed of release to the Land Registry who may agree to remove details of the rentcharge from the register