How reliable is a properly drafted Deed of Variation?

Keflon

Hello everybody

I am trying to buy a flat above a shop with cash and there is a problem with the lease.
My solicitor has been insisting that I get a Deed of Variation to cover the defects and the seller has instead proposed indemnity insurance. The latter I thoroughly reject.
Now after three weeks the seller has agreed to get a DOV but my solicitor has now decided to advise against buying the property at all because the underlying lease is so poor and if I want to proceed he will require me to sign a form stating I am acting against his advice. His case is that a poor lease with a DOV may prevent a future buyer from raising a mortgage on it.
Whilst I wonder why my solicitor has changed his mind and effectively wasted three weeks of my time chasing a DOV, the real question is as follows:

If a DOV is gained that addresses all of the problems my solicitor has raised, is it something I can rely on?

The following is a headline list of the defects in the lease as it stands (pasted from email by my solicitor):

1. The description of the premises, what you are actually purchasing and will be responsible for needs clarifying.
2. The repairing obligations on the part of the Tenant and Landlord need to be expanded and more specific.
3. The Insurance provisions are inadequate.
4. The provisions for joint maintenance, responsibility for common parts need to be incorporated in the Lease.

To pose the same question in a different way, if I have a defective lease and the defects are corrected in a DOV, is the resulting document as good as having a proper lease to start with?

It is a 900 year lease granted in 1985 and it is for a two bedroom self-contained flat above a shoe shop. The landlord appears to be a private individual and there is no management company or maintenance charge.

I sold my apartment over two months ago and I'm sleeping in a friend's spare room. It's not good for me or my 4 year old son.

Any help or advice is gratefully accepted.

DVardysShadow

Keflon wrote: »

... I sold my apartment over two months ago and I'm sleeping in a friend's spare room. It's not good for me or my 4 year old son.

Any help or advice is gratefully accepted.

All the more reason not to rush in against the advice of your solicitor. Else you could lose your cash and be permanently in a friend's spare room or worse.

Don't let the pressure of your immediate situation force you into this deal. As you don't have a mortgage, you are especially vulnerable to a bad buy, because you don't have to surmount the hurdle of the property being mortgageable.

My guess is that your solicitor has decided to compare this property against mortgage criteria and has decided that even with the DOV, he would advise any mortgage lender he was acting for not to lend on this property.

He is doing you a favour, albeit a bit late.

hazyjo

Most mortgage providers aren't giving mortgages for flats over shops at the mo. Obviously that doesn't affect you buying cash, but would affect people buying off you. The fact your solicitor is saying there are further issues regarding the lease, even after sorting a DOV, do you want to take the risk of buying it? Do you see it as a long term home? Personally, I'd not touch it with a bargepole.

Any reason why you've chosen to buy over a shop? Would you be able to get a small mortgage and up the budget a bit if it's for financial reasons?

Jx

DVardysShadow

hazyjo wrote: »

... Would you be able to get a small mortgage and up the budget a bit if it's for financial reasons?

Jx

If nothing else, getting a small mortgage and keeping a bit of money back will ensure thta mortgage criteria are fully taken into account in the purchase process, which should provide some assurance over resale.

Keflon

Thanks for the replies.
To answer some questions and to give some background:
I cannot raise a mortgage. I had planned with my bank to leave my job, become self employed, sell my house and transfer my existing mortgage to a smaller property. Having left my job and started a business and sold my house my bank changed their mind (as I have no income). In fact they denied ever agreeing until we found a recorded conversation to the contrary. I have a case open with the banking ombudsman.

My business equipment is in storage along with pretty much everything else I own so I can't earn money whilst in this limbo. I am close to outstaying my welcome in my current location.

The cash I have is just enough to buy at the bottom end of the market in my chosen area. As time passes this is being spent. I don't want to step out of the property market and if I wait too long or start paying a proper rent somewhere while I keep looking I will further restrict my already critical spending limit.

This urgency doesn't mean I will make a rash decision. That is why I want to know if a repaired lease is as good as a lease that is good to start with.
If it is not then I will look for another property.

This is the third property I have tried to buy, others have failed due to poor survey results. If I could raise a small amount of money I could be looking at a different class of property but alas that is not possible.

Thanks again

BitterAndTwisted

In which case I would walk away from this property and find somewhere to rent for a bit until you have your business sorted out.

hazyjo

Doesn't look like prices are going sky high any time soon. I'd rent for a while. I really don't see that you have a choice. Can't you rent then reassess in six months? I know it costs to rent, but at least you'll have a roof over your head. Not really fair for your friend to still be putting you and your son up when it was meant to be short term so you don't have to spend the money you do have on rent. Don't mean that to be judgemental - just going from what you're saying.

It sounds like you've reached crunch time, and I can't see another option other than renting.

Could you maybe try and get a job for now, then start the business again once you're in a position to do so?

Jx

joerugby

Don't buy a flat above a shop. You won't be able to sell it when the time comes

kmmr

The solicitor hasn't wasted you time - he has saved you from trapping yourself in an unsaleable flat for many years. I assume if you are buying at the bottom end of the market, then you would at some stage like to sell and upgrade to somewhere better. You don't want a difficult to sell flat.

Perhaps if you rent for a year or so you can get some income from the business, or get a proper response from your complaint to the ombudsman.

These decisions are often hard when the immediate situation is difficult, but patience is usually the best option. To be honest, with a faulty title, the process could take ages anyway, so finding somewhere to live shortterm regardless seems a good idea.

Thrugelmir

DVardysShadow wrote: »

My guess is that your solicitor has decided to compare this property against mortgage criteria and has decided that even with the DOV, he would advise any mortgage lender he was acting for not to lend on this property.

He is doing you a favour, albeit a bit late.

Most likely having made enquiries with the vendors solicitors this is the outcome.

Keflon

Hello and thanks for the interest.
I feel that my solicitor has wasted my time because I acted on their specific advice and then three weeks later they changed that advice, rendering my activities of the preceding three weeks useless. - edit: This is irrelevant to my question.
My best course of action - as suggested - may be to rent somewhere or some other course of action and you can believe me when I say I am open minded to other outcomes.
That said, if a deed of variation is something I can rely on then I could possibly be in my new flat as a tenant next week while the owner sorts out the said deed. This is my preferred outcome and for it to happen I need some idea as to the reliability of a Deed of Variation. I want a permanent address for my son and this is a chance at providing one so if I walk away from it I want to be sure I am doing the right thing.

So to get back to the original question ... if I have a defective lease and the defects are adequately corrected in a Deed of Variation, is the resulting document as good as having a proper lease to start with?

Thanks again