Rentcharges Act 1977

Redemption

8 Application for redemption certificate

(1) The owner of any land affected by a rentcharge may apply to the Secretary of State, in accordance with this section, for a certificate (in this Act referred to as a " redemption certificate ") certifying that the rentcharge has been redeemed.

(2) Every application under this section shall be in such form and shall contain such information and be accompanied by such documents as may be prescribed by regulations.

(3) In any case where the Secretary of State considers that any additional document or information ought to be furnished by the applicant he may require the applicant—

(a) to deliver to him such documents (including documents of title and, in the case of registered land, an authority to inspect the register), and

(b) to furnish him with such information,

as the Secretary of State may specify.

(4) No application may be made under this section in respect of a rentcharge of a kind mentioned in section 2(3) or 3(3)(a) above.

(5) An application under this section may only be made—

(a) if the period for which the rentcharge concerned would remain payable if it were not redeemed is ascertainable, and

(b) in the case of a rentcharge which has at any time been a variable rentcharge, if it has ceased to be variable at the time of making the application.

For the purposes of this section a rentcharge shall (at any time) be treated as variable if at any time thereafter the amount of the rentcharge will, or may, vary in accordance with the provisions of the instrument under which it is payable.

(6) Where an applicant's documents of title are in the custody of a mortgagee the mortgagee shall, if requested to do so by the Secretary of State for the purpose of an application made under this section, deliver those documents to the Secretary of State on such terms as to their custody and return as the mortgagee may reasonably require.

9 Issue of redemption certificate

(1) Where an application for a redemption certificate has been duly made under section 8 above, the Secretary of State shall serve notice of the application (" notice of application ") on the person appearing to him to be the rent owner in relation to the rentcharge to which the application relates or his agent.

(2) A notice of application shall require the person on whom it is served to notify the Secretary of State, before the expiry of the period of 21 days beginning with the date on which the notice of application is served, whether or not he is the rent owner in relation to that rentcharge.

(3) Notification under subsection (2) above shall be given in the form prescribed by regulations and shall contain such information, and be accompanied by such documents, as may be so prescribed.

(4) Where the Secretary of State has been duly notified under subsection (2) above, or the period mentioned in that subsection has expired without his being so notified, he shall serve a notice (" instructions for redemption ") on the applicant for the redemption certificate—

(a) specifying the sum required to redeem the rentcharge (the " redemption price ") calculated in accordance with section 10(1) below, and

(b) naming the person (determined in accordance with section 10(2) below), if any, appearing to the Secretary of State to be the person to whom the redemption price should be paid by the applicant.

(5) After service of instructions for redemption, the Secretary of State shall issue the applicant with a redemption certificate on proof—

(a) that the applicant has, before the expiry of the period of 28 days beginning with the date on which the instructions are served—

(i) paid the amount specified as the redemption price to the person named in the instructions as the person to whom payment should be made, or

(ii) where no person is so named, paid that amount into court in accordance with section 10(4) below, or

(b) in a case where the applicant has been authorised to do so under subsection (6) below, that he has paid that amount into court in accordance with section 10(4) below before the expiry of that period, (or such longer period as the Secretary of State may allow).

(6) For the purposes of subsection (5)(b) above, the Secretary of State may authorise payment into court in any case where he is satisfied that the applicant is unable to effect payment in accordance with the instructions for redemption or that it would be unreasonable to require him to do so.

10 Provisions supplemental to section 9

(1) For the purposes of section 9 above, the redemption price shall be calculated by applying the formula:—

where:—

• P = the redemption price ;

• R = the annual amount of the rentcharge to be redeemed;

• Y = the yield, expressed as a decimal fraction, from 2 ½ per cent. Consolidated Stock; and

• n=the period, expressed in years (taking any part of a year as a whole year), for which the rentcharge would remain payable if it were not redeemed.

In calculating the yield from 2 ½ per cent. Consolidated Stock, the price of that stock shall be taken to be the middle market price at the close of business on the last trading day in the week before that in which instructions for redemption are served under section 9(4) above.

(2) For the purposes of section 9(4)(b) above, the person to whom the redemption price should be paid is—

(a) in a case where the rentcharge was subject to a mortgage, the mortgagee or, if there is more than one mortgagee, the first mortgagee;

(b) in a case where the rentcharge was not subject to a mortgage but was settled land or was subject to a trust for sale, the trustees ;

(c) in any other case, the rent owner.

(3) Where a redemption certificate has been issued under section 9 above—

(a) it shall have the effect of releasing the applicant's land from the rentcharge concerned, but

(b) it shall not affect the exercise by the rent owner of any right or remedy for the recovery of any rent which accrues before the date on which it was issued.

(4) Where a payment is made into court for the purposes of section 9 above, the sum concerned shall—

(a) if it does not exceed the amount for the time being mentioned in section 39(2) of the [1959 c. 22.] County Courts Act 1959 (general jurisdiction in actions for recovery of debts), be paid into the county court, and

(b) in any other case, be paid into the High Court.

(5) Any person who, in notifying the Secretary of State under section 9(2) above, makes a statement which he knows to be false in a material particular, or recklessly makes any statement which is so false, shall be guilty of an offence punishable on summary conviction by a fine not exceeding £1,000.