Deed of Variation for loft space

davidmcn

nicmyles wrote: »

What would the indemnity insurance even cover in this case? Costs attached to purchasing the space? To restoring it to its original state if the freeholder demanded that (as they could potentially do depending on terms of the lease and whether or not the previous leaseholder had permission to do the conversion)?

Hopefully both of those. It's certainly possible to insure against the risk that you can't make a successful claim for adverse possession and/or obtain consent for the alterations, though would be useful for us to know exactly what risks are covered and whether the previous dealings with the freeholder/neighbours have any effect on the cover.

I think for most buyers the potential unknown costs and inconveniences are so massive, it's going to be a deal-breaker for most.

The insurance covers the costs, it's the inconvenience which is the issue.

bobobski

Watch out for any deed of variation which alters the demise or alters the term of a lease. At law, this may be interpreted as a surrender and re-grant and this may have an adverse SDLT effect on you. If you're going to appoint a solicitor for this, make double sure you can claim overlap relief. A supplemental lease may be better (can be done quickly and cheaply if by reference to your existing lease). For a quick summary, see here: https://www.hilldickinson.com/insights/articles/five-faqs-surrender-and-regrant.

strawberries1

OP, a supplemental lease is the deed by which the loft will be purchased.

You agree a purchase price with the freeholder (if he's willing to sell) and pay your solicitor's legal fees to agree the supplemental lease for purchase of loft space.

The planning and building regs issue you resolve with the Council but the statue of limitation means any action by them will be out of time already so they can't enforce. A simple letter will do.

The Council deed

bybyhosa

Thanks everyone for all the useful information, that really helps us a lot in understanding the issue. The vendor where we're buying from has decided to put their house back on the market and we agreed that as we don't want to waste other ppl's time if it's going nowhere (sadly we're losing the house ), and since our buyer still insists a deed of variation, we're prepared to let the deal fall through and seek to get the problem properly resolved with more time and less pressure.

As for the insurances we had, one of the them was a defective title insurance which covers the fact that the lease doesn't include the roof space as part of the demise, the other one was an indemnity insurance which covers the fact that there's no building/planning permission.