Paragraph 4 Priority between rentcharges and mortgages

Where a rentcharge owner makes a rentcharge claim and the right to receive the compensation in respect of the interest in land out of which (or out of which together with any other interest) the rentcharge was created is vested by virtue of the provisions of regulation 9 of these regulations in a mortgagee of that interest, then—

(a)

if the rentcharge had priority to the mortgage, the sum payable to the mortgagee under regulation 9 shall be reduced by the amount required for giving effect to the right conferred upon the rentcharge owner under paragraph 2 of this Schedule; and

(b)

if the mortgage had priority to the rentcharge, the Secretary of State shall, when making the payment of any compensation to a mortgagee in pursuance of regulation 9, give to that mortgagee notice of—

(i)

the name and address of the rentcharge owner who has claimed the rentcharge payment, or, if that owner has appointed any agent to act for him in connection with the payment of such a sum, the name and address of that agent; and

(ii)

the amount of the rentcharge payment which the Secretary of State, or the Lands Tribunal if any dispute has been referred to them, has determined to be payable to the rentcharge owner out of compensation,

and the mortgagee to whom the compensation is paid under regulation 9 shall give effect to the right conferred by paragraph 2 of this Schedule on the rentcharge owner out of the sum to which the person who would have been entitled to the compensation apart from regulation 9 will become entitled under the provisions of paragraph (5) of regulation 9 relating to a mortgagee accounting for any compensation as if it were proceeds of a sale.