Issue with flat with new lease

Will_of_the_forest

Hello having a bit of trouble and hope that someone could help.

My wife and I were about to purchase our first flat but the lender refused to go ahead due to the doubling ground rent clause so we couldn't go ahead.

A month or two later the estate agent asked if we would be interested in purchasing if the seller entered into a deed of variation to reduce the ground rent to peppercorn.

We agreed however the lender now wants a signed deed but the sellers solicitors are saying that the signed deed will be signed simultaneously on completion and this is the norm.

Solicitors on both sides are being vague. I rang the lender but they just said to get the solicitor to write to the valuer to see if they'd accept a draft.

Has anyone had experience of this? What's to stop the seller not signing the deed?

Also the seller will not purchase another management pack the one we have is 6 months old.

Any help or advice would be greatly appreciated.

davidmcn

Will_of_the_forest wrote: »

the lender now wants a signed deed

Think you need to clarify what you mean by "now" and "a signed deed"!

Do you mean they want the lease variation to have been completed (and registered?) before you exchange contracts? Or just that the deed has been signed, and will be completed when your purchase completes? Or just that they want it signed and completed no later than completion of the purchase?

In any event, it's almost certainly their solicitor (who I presume is also your solicitor) advising them on what they ought to want, so you should speak to your solicitor to clarify.

What's to stop the seller not signing the deed?

The same principles which stop the parties not signing any of the other deeds. It'll be a condition of the contract that it's done (if it hasn't been before exchange), and the solicitors won't complete until they're holding all the necessary deeds.

bouicca21

I suspect that the vendor's costs in renegotiating the lease are high and can't be paid until (s)he sells. As above, what exactly does the lender want?

Tom99

[FONT=Verdana, sans-serif]To me this sounds suspiciously like the seller is offering to serve a section 42 notice to extend the lease, then assign that notice to you to take forward. Ie you would be the one negotiating and paying for the lease extension.[/FONT]
[FONT=Verdana, sans-serif]However if the seller has already reached an agreement with the freeholder either to reduce the ground rent or extend the lease, why the delay? Unless seller and freeholder have at least exchanged contracted on this deal the freeholder could pull out at any time so I don't see how the seller can guarantee the variation will be concluded unless they do it at least before exchanging contracts with you.[/FONT]

eddddy

Tom99 wrote: »

[FONT=Verdana, sans-serif]However if the seller has already reached an agreement with the freeholder either to reduce the ground rent or extend the lease, why the delay? Unless seller and freeholder have at least exchanged contracted on this deal the freeholder could pull out at any time so I don't see how the seller can guarantee the variation will be concluded unless they do it at least before exchanging contracts with you.[/FONT]

There shouldn't be a problem with a lease variation on completion.

The solicitors would link the sale contract with the lease variation contract.

i.e.

• They are both exchanged at the same time
• They are both completed at the same time
• The solicitors ensure that they are exchanged together - one cannot be exchanged without the other

(Just like when you sell and buy a house at the same time - the solicitors link the sale contract and the purchase contract, so that they exchange together and complete together.)