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Joshua, Lawyer
Category: Law
Satisfied Customers: 32218
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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I moved in a freehold property with rentcharges. The

Customer Question

Hi I moved in a freehold property with rentcharges. The developer was supposed to register the restriction RX1 to land registry before the completion according to section 106 but they have applied to register one month after the completion date along with TP1. On the similar basis some residents arenow submitting RX3 to cancel but my specific property also have charges registered on the company's house.
JA: Where are you? It matters because laws vary by location.
Customer: Ashford kent
JA: What steps have you taken so far?
Customer: I have called Land registry who confirmed there is no RX 1 submitted yet against my title
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Yes, On that basis, a resident recently won a court case against the developer and the management company. The court 1) barred the respondents from defending the proceeding 2) the Cheif land Registrar is directed to complete the applicant's RX3 as if no objection has been made.
Case Number: REF/2022/0234
Submitted: 17 days ago.
Category: Law
Expert:  Joshua replied 17 days ago.

Hello and thank you for your question. My name is ***** ***** I will be very pleased to assist you. I'm a practising lawyer in England with over 15 years’ experience. Please be aware that although I will endeavour to reply to you promptly, I am also in full time private practice and so I may not be available to respond immediately and it may also take me a few minutes to prepare a reply. The site will notify you as soon as I respond. I look forward to working with you to answer your question fully.

Expert:  Joshua replied 17 days ago.

I'm sorry to read of the above. Does this mean that the situation is that certain residents are left liable for rent charges whilst others are not please?

Customer: replied 17 days ago.
it would appear so as they have own to case to register RX3 to cancel the restriction
Customer: replied 17 days ago.
The only difference with my property is that I can an MR01 Charge has been registered on companies house under the Management company agreed by the developer and management company on 26th Oct 2021. What is even more strange is they have put this charge against only my property among 86 other houses!
Customer: replied 17 days ago.
However, they still didn't register the restriction via RX1 in the Land registry title before the completion date. Which was the primary argument basis the resident won the case in the
Customer: replied 17 days ago.
would the MR01 charge they filed on companies house would have any impact on the RX3 application?
Customer: replied 17 days ago.
dentifying the issue, the management organisation and the developer revised their process- see attached notes where MR01 charges are mentioned. I can see they have followed a similar process on my sale except for RX1 was not registered prior to the sale. MR01 also submitted to companies house 1 month after the exchange of contract. This was not informed to me by my conveyancing solicitor.
Expert:  Joshua replied 17 days ago.

  1. thank you. Have you contacted or taken any advice from a conveyancer on the matter to date?
  2. besides the restriction issue that you refer to, is there any other notice of a rent charge on the title and is liability to pay rent charge contained within the transfer deed for the various properties that have been transferred?
  3. you refer to a charge being entered at companies house. Do you know what this relates to?

Customer: replied 17 days ago.
1. I have not contacted my conveyancer yet, he was recommended by the developer. It appears he failed to inform me on companies house charge. I will contact him for the RX3 once I understand the implication.
2 Land registry confirmed there is no existing rent charges/or other restriction put on the property. But I expect the develop and management company will submit an RX1 related to 3 rent charge deeds signed as they have done for other plots.
3. Appears these are MR01 changes against my property agreed between the developer and the management company related to the three rent charges deeds. here is the copy: I'm not a signatory to this and happen after the exchange of contract. no other properties have this put on a similar charge which is very strange!
Expert:  Joshua replied 17 days ago.

Rent charges are or at least should be contained within the transfer deed transferring the property to you and should not be reliant in and of itself upon the restriction being entered on the title. In other words, the liability to pay a rent charge - it is not clear to me therefore the purpose of the attempts to cancel the applications for restrictions as whilst this may obviate certain requirements of the property owner upon any disposition of a property in the future, it would not in and of itself obviate the obligation of the particular seller to pay a rent charge that is contained within the transfer deed.

in relation to the charge registered at companies house, though I have not reviewed all of the documents in depth as they are very long and it is not economic me to do so, on the face of it, it seems to me that the registration of these charges was a mistake is the management company appears to be the beneficiary and not subject to the charges. I note that three charges were registered and subsequently, have all been released and it appears that potentially, whoever registered the charges realised their mistake hence why they have been released and marked a satisfied.

clearly a proper review of the situation will be needed to the extent that your conveyancer is not already familiar with it and in particular, clarification should be sought of the management company that the rent charges are enforceable against all residences on the estate so that no residents in particular will bear a disproportionate sum in this regard failing which, you may have a claim for breach of contract as against the developer though the above in and of itself does not indicate that rent charges envisaged would not be enforceable against other residences per se

Customer: replied 17 days ago.
Many Thanks for the above. Yes, rent chare deeds I assume were submitted along with the transfer application. But the mechanism by which the rent charge is enforced and passed on to the future buyer is through these restriction on the title put on my the RX1. I understand the rent charges may be liable through the deeds but the aim is to remove any draconian enforcement mechanism via RX3 cancellation of any restriction application. The basis for this is under section 106 any restriction should have been registered on the title before the exchange of contract not after. Do you agree with the above understanding?Thank you for confirming the charges has been satisfied, which means it should have no bearing on the RX3 application!Yes, I will consult with the conveyancer but may need to seek independent advise as he did not advise /inform me properly during the process of the implications. Some residents are as it seems won't be paying rent charges so it won't be fair for others to pick up the bills.
Expert:  Joshua replied 17 days ago.

I don't agree with all of the above elements of your summary I am afraid. A rent charge can be entered onto a title in its own right as a notice under land registration act 2002 (paragraph 6, Schedule 2, LRA 2002). there is no requirement for a restriction for a rent charge to be enforceable. They are entirely separate forms of notices and one is not reliant upon the other. I assume the restriction as an additional provision requiring the owner to comply with some additional element but it is not necessary for the rent charge to be enforceable hence my above comments

Customer: replied 17 days ago.
Ok understood. In short, still likely to be liable for rent charges but I think the restriction is put on so that the property can't be sold without the burden of the rent charges. Would you advise to out on an RX3 to cancel such restriction? this would put me in the same situation with the other residents who have won the case against court to remove restrictions. As you say I'm not sure what rent charges they signed but appears they can still be liable.
Expert:  Joshua replied 17 days ago.

it is difficult for me to comment on the restriction element as I do not know what restriction achieves. However, my interim conclusion would be that it is not likely to be determinative in terms of liability under the rent charge. Providing the rent charge was included in all of the relevant transfer deeds for the properties, it seems to me that the various property owners would still be liable under the rent charge irrespective of their applications to remove the restriction being successful or not but clearly without sight of all the documentation in question, I cannot be conclusive on this point. You conveyancer will presumably be in a much better position to confirm or clarify the above accordingly

Expert:  Joshua replied 17 days ago.
I hope the above is of some assistance but if you have any further questions, please revert to me.
Expert:  Joshua replied 16 days ago.

I trust the above was of assistance and that you do not have any follow up questions for now. If there is anything else I can help with please reply back to me though.

Expert:  Joshua replied 15 days ago.

I hope I was able to answer your question. If you would like to ask me another question in the future, you can add me as a favourite Expert. You'll have the option to do that on your "My Questions" page if you choose to rate our interaction or you can request me by name if you wish. Thank you again for visiting JustAnswer and see you again in the future I hope.