Deed of Covenant Charge

morwok

Hi,

Spent a good deal of time trying to research this and not found too much information. In short I am buying a leasehold flat and have been advised I need to sigh a Deed of Covenant at a charge of £260?

This seems extortionate to me but wondering what others thoughts are. I have not got a copy of the lease yet but don’t doubt it says I must sign this but from what I gather it is just agreement saying I will do what the lease specifies. It seems a lot to me and considering I will be agreeing to the lease anyway seems just another way for Managing Companies to fleece you?

Thanks for your thoughts.

devotee

Oh you have to pay it? Lucky for your vendor, I'm paying for it as a vendor....

Yeah, they fleece you, not much that I can add to it sadly... So far I've paid over £1k only for management info when selling.

Richard_Webster

from what I gather it is just agreement saying I will do what the lease specifies. It seems a lot to me and considering I will be agreeing to the lease anyway seems just another way for Managing Companies to fleece you?

Very often this is the case and £260 is over the top anyway for what they do for the money. If there is a separate management company that has responsibilities under the lease but does not have its own lease of the building or own the freehold it won't have any standing so a deed of covenant with it will be necessary.

More often as you say it merely repeats obligations that would bind you anyway so is unnecessary and purely a money making exercise for the managing agents.

morwok

Thanks for the replies.

I assume there is nothing I can do but pay this and I would gave thought it was the buyer that usually paid as well. As far as I know there is only one managing agent involved?

Will I have any luck disputing the amount?

timmyt

negotiate it with the Seller, as technically the seller cannot sell unless they get you to enter into this, so akin to permission for them to sell. £260 is high for no work by the mt company and for a document that does nothing that the lease already binds you to.

Dibo

Hi

I have been asked by my solicitors to pay an additional Deed of Covenant fee of £132. I purchased my house through a housing development Scheme and was told they have paid their side of this.

This is what I have had back,

On completion on your case we had to pay a fee to Bovis and Charlton Hayes Management Company in total of £132 in respect of a Deed of Covenant.

We managed to get Sovereign to agree to pay this so there was no cost to you. If you look at the "Less" section of your completion statement it shows "Deed of Covenant Fee £132" which is deducted from the total payable by you. This is an allowance from Sovereign so that they are effectively paying the fee. However, the same figure should also have been shown in the "Plus" section because the money also has to be paid out to Bovis and Charlton Homes. It wasn't included because of oversight, which means we asked you £132 too little.

I apologise that this has only come to light now. We have only realised the error as a result of the process of registering with the Land Registry.

We will sort this out, however, I must ask you to pay the £132 and I apologise again that this oversight has happened.

Can theu ask for this fee up to 3 months after I have paid all my fees ?

Regards