Selling House With a Rentcharge

Freeholder owners of properties are sometimes required to pay a rentcharge for the land where the home is located, and this can create complications when trying to sell your house.

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Your top questions when selling property with a rentcharge

✅ What exactly is a rentcharge as applied to freehold homes?

The concept of rentcharges was first introduced during the Victorian and Edwardian eras in the UK, and they sought to encourage developers to build homes at a reduced cost, through an agreement where landowners sold land to builders for free or at a low price, in exchange for the future freeholder homeowners paying the former landowner an annual income.

✅ Why might some buyers be wary about properties with a rentcharge?

Although rentcharges are typically only about £10, if you have one at your property you could discover that it is much harder to get buyers interested. That is because they could worry about the potential for the rentowner to pursue litigation to recoup any unpaid rentcharges with hundreds of thousands of pounds of penalties added on top to the underlying charges.

✅ Could a homeowner just ignore a rentcharge and sell their house?

You should never simply try to pretend that you don’t owe a rentcharge because it will create many more financial and legal problems than simply paying the fee each year. Rentowners don’t have to issue a formal demand for a late payment, so they could simply wait until you’re 40 days late on paying the fee and then launch what would be a very costly enforcement action.

✅ Should I fight a rentcharge before seeking a buyer for my property?

You only have a few available strategies for trying to challenge a rentcharge at your home, and some or all of these may not be compatible with how fast you want to sell, your budget and more. Options include waiting until 2037 when rentcharges expire, attempting to buy out your rentcharge, or getting the buyer to have their mortgage provider obtain indemnity insurance.

✅ What options are available for selling a home that has a rentcharge?

The four usual ways to sell a property with a rentcharge are trying your luck with an auction, getting in touch with a quick buyer such as LDN Properties, selling with the services of an estate agent or selling without any third-party help. There are pros and cons associated with all four of these methods, such as how individual methods take and whether they charge any fees.

✅ What's the swiftest way to find a buyer for my house with a rentcharge?

Contacting LDN Properties or another quick home buyer will usually be the quickest option for selling this type of home because the timeline should be just a few short weeks, and this covers the final steps of exchanging contracts and paying the seller the proceeds. But it can take at least several months to sell with an estate agent, at an auction or on your own.

✅ How much will I pay in commission to sell a home that has a rentcharge?

If you opt for selling your property using the services of either an auctioneer or an estate agent then you will need to them commission and this will be subtracted from the eventual sale proceeds, which will increase your expenses. But if you sell to a no-fee quick buyer like LDN Properties or you sell without any assistance then you won’t pay any commission.

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