Rent charges are quirky. Because of this, the way in which they operate is often misunderstood.
Service charges, maintenance charges, amenity charges, and various other terms are generally used to describe an estate rent charge.
Essentially, an estate rent charge is the mechanism by which a freeholder contributes towards the costs of services provided for on their estate. This can include things such as the carrying out of maintenance or repairs, insurance, together with other services for the benefit of amenity land within the estate.
Typical estate rent charge schemes
On developments of interdependent properties, such as a group of freehold houses, it’s becoming common for a management company to be set up to provide services in relation to the common parts, and look after the maintenance insurance of the development as a whole.
Each freeholder will be obliged to contribute towards those costs by means of payment of an estate rent charge.
Often, each freeholder is also a member of the management company, with the idea being that the freeholders between them control the management company.
Non-payment of estate rent charges
Non-payment of estate rent charges is a potentially serious matter. Serious and far-reaching consequences can flow from it. The management company (as rent owner) could commence action in the courts. Ultimately, the arrears could result in a claim for possession of the property.