selling flat - seed of variation

[phon]

I'm middle of selling my flat (107year lease left) and was asked for deed of variation from buyers lender.
I heard it cost a lot for this to ask management company.
I have checked with friend of my who sold her flat last year but she didn't need to do this.

Would someone give me idea what this is for? sorry i'm totally at a loss!

[phon]

sorry for typo.. i meant 'deed'

[MinnieMountain]

What did your conveyancer tell you it’s for?

Every block is different, so what your friend did doesn’t matter.

[phon]

It seems buyers lender is asking for it. is that true that this deed of variation is getting common in selling flats recent years?

[MinnieMountain]

Yes, but what bit in the lease doesn’t meet the buyer’s lender’s requirements? The ground rent? Or something else?

[phon]

I don't know what that could be.. sorry but I have absolutely know knowledge of this terms and so confused..
I have received email from my solicitor saying below: does it have to be particular reason why buyers lender is asking for it?


The buyers lawyers asked us to get them the costs of a change to the lease which is called a deed of variation.

[BoneAppleTeaa]

It’s probably just to get the lease transferred into the buyers name?

[phon]

Thank you! I'm really confused..
does buyers lender ask to get it done? or buyer wants to do it??

[Lurkingforawhile]

Your solicitor should be telling you this. It's specific to your transaction so noone here will be able to answer your question. Ask your solicitor to do their job and explain it to you!

[phon]

I see thanks for tour advice!
i have been looking on internet what this all about and it seems there are various reasons, such as extend lease or it can be alternation of lease request as buyer wants to keep pet??

Do I have to pay the cost for it or buyer is paying?? thanks again!

[GU24Mum]

OP: you really need your solicitor to tell you :

(a) what the deed of variation would vary;
(b) whether it's a reasonable request (things change and lenders take view on things when they might not have done previously);
(c) whether you're being asked to pay the costs;
(d) whether you're happy for the solicitor to approach the landlord.

Just telling you a buyer has asked for a deed of variation if you weren't given any other into is very unhelpful!!

[phon]

Thanks! I'm going to get in touch with solicitor for further details;)

[Lurkingforawhile]

Is your solicitor one of the cheaper ones (sometimes, rather rudely, known as a conveyancing factory)? If so you'll need to be persistent. @GU24Mum has set out the questions you need answers to. They have cheap fees so need to do the minimum possible to make a profit. Having said that they charge more for leasehold precisely because it's often a bit more complicated. Good luck!

[20questions]

@GU24Mum has given you excellent pointers. A deed of variation can be for many things. At the present time, it is often the ground rent terms that are asked to be varied. Do you have an increasing ground rent clause- either increasing by doubling or by rpi? If this is the case and at any time in the duration of the lease, the g/r will be over £250 (outside of London) or over £1000 (in London) or be more than 0.1% value of the property, this will cause problems with most lenders.
That's one common scenario where a variation is requested by the potential buyer's solicitor (providing the solicitor is a good, competent one). However there are many others and you should make sure you have a competent, preferably leasehold specialist, solicitor as they will need to advise you. Variations always cost money and negotiations will be needed between freeholder/seller and seller/buyer.

[phon]

It seems buyers lender is asking for it in order to process mortgage. lender is saying they need security of freeholder not to increase grand rent in near future.
my flat was offered for 230k and ground rent is always 200£pa for last 4years.

our solicitor is good, but she was saying she hardly dealt with deed of variation in past.
I heard from some people that lender is strict due to covid, they are tighter in lending so that require such deed of variation, is that right??

[MinnieMountain]

Ground rent has become more of a “thing” in recent years as @20questions explained.

Your lease must have provision in it for the ground rent to increase above £250 or in a way that the lender doesn’t like.

Different lenders have different requirements but your buyers conveyancer would have looked them up before asking you for the variation.

So it sounds like you now need to ask your management company what they would charge.

[phon]

I see.. does management company has right to refuse change in deed?

[20questions]

Yes - they have the right to refuse. More likely they will vary but charge you for this - the amount depends on what the current g/r terms are and how greedy they are!

[Lurkingforawhile]

Your solicitor is not a good conveyancer for leasehold if she's hardly dealt with a deed of variation. They are very common - ask for it to be passed to someone else in the firm to get a proper service.

[phon]

management company is now asking if we want to request change of deed, they will initially charge us certain amount even though it is not guarantee if it will be done or not in the end.
That's really unfair I feel.. why should I pay for something that is not guaranteed to be done??

[phon]

the reason of request to change deed was:

The buyers mortgage lender was not happy with the current wording of the lease in relation to ground rent.

[Spickle]

You do have a copy of the lease, right?

Please quote the exact wording of the lease in relation to the ground rent, in order that we can better advise you.

[jeff1965]

Join the Facebook group National Leasehold Campaign for advise. You can search the group for deed of variation and you will find lots of information

[phon]

will read through copy of the lease! it has many special wording which are hard to understand though..;(
thanks for info about facebook group, that is very useful!

[20questions]

National Leasehold Campaign Facebook group is excellent for anyone looking for help/support/advice regarding their lease, enfranchisement, service charges, cladding issues etc.

[20questions]

m.facebook.com/groups/nationalleaseholdcampaign/