Criteria guide

Estate rent charge

If the property is freehold and subject to estate rent charges, please note the following:

  • Where the charge is historic, is not related to services being provided and has not been collected for 12 years or more, then an appropriate indemnity policy should be obtained on completion to protect our security.
  • Where an estate rent charge has been collected in the last 12 years and/or relates to the costs of services being provided, it will be acceptable in either of the following circumstances:
    • Where the rent charge owner is a management company owned by the residents of a private freehold development (as shareholders) and the borrower will become a shareholder on completion.
    • Where the statutory remedies in section 121 of the Law of Property Act have been expressly excluded in the rent charge instrument and where the rent charge instrument contains notification to the mortgagee of at least 2 months prior to any enforcement action by the rent charge owner.