Deed of Variation for error in lease

Jigglebiz

Could I clarify with those who have read the section from my lease whether the situation is :
a) that the lease is unclear and requires a deed of variation as per the buyers sol original request
Or
b) when read carefully (paying attention to capitalisation!) the lease does not contain an error or contradiction

And whether the difference between these positions is a matter or opinion or not?

Solicitors are battling it out over this. I’m no sol but am academically trained (eye for detail!) and I have come to conclusion b)

davidmcn

Jigglebiz wrote: »

Could I clarify with those who have read the section from my lease whether the situation is :
a) that the lease is unclear and requires a deed of variation as per the buyers sol original request
Or
b) when read carefully (paying attention to capitalisation!) the lease does not contain an error or contradiction

And whether the difference between these positions is a matter or opinion or not?

It certain contains an error (or several) and it's not clear what was intended to mean. Whether that's worth spending several thousands sorting it out is more a matter of opinion.

eddddy

Jigglebiz wrote: »

Could I clarify with those who have read the section from my lease whether the situation is :
a) that the lease is unclear and requires a deed of variation as per the buyers sol original request
Or
b) when read carefully (paying attention to capitalisation!) the lease does not contain an error or contradiction

And whether the difference between these positions is a matter or opinion or not?

Solicitors are battling it out over this. I’m no sol but am academically trained (eye for detail!) and I have come to conclusion b)

I think everyone here agrees that the lease is absolutely clear about the first 25 years - the ground rent is £100.


But I think the freeholder intended ground rent to increase to £200 in year 25 - but the lease seems to actually say it increases in year 30.

Tom99

Jigglebiz wrote: »

Could I clarify with those who have read the section from my lease whether the situation is :
a) that the lease is unclear and requires a deed of variation as per the buyers sol original request
Or
b) when read carefully (paying attention to capitalisation!) the lease does not contain an error or contradiction

And whether the difference between these positions is a matter or opinion or not?

Solicitors are battling it out over this. I’m no sol but am academically trained (eye for detail!) and I have come to conclusion b)

I think it is both a) and b).
Read literally the 1st review is in year 30, but it is certainly not clear that is what was intended. It also contains errors since what the lease actually says is obviously not what it should say. There is also a contradiction since it defines the Initial Rent as £200pa whereas the actual initial rent is £100.
It could be that the lease was meant to be a rent of £200pa reviewed after 25yrs.

getmore4less

pretty clear the first review is at 25 years and not 30years.

Jigglebiz wrote: »

So I have my lease here. On the front page there is a table which states
"the Rent: For the first 25 years of the Term the yearly rent of £100 and thereafter in accordance with the provisions of the seventh schedule"

p.45
"The Seventh Schedule
Provisions for review of the rent

1. For the purposes of this Schedule the following provisions have the following meanings:
1.1 'the Base Figure' means the Index Figure for the month preceding the First Review Date
1.2 'the First Review Date' means the twenty-fifth anniversary of the commencement of the term
1.2 'the Increase' means the amount (if any) by which the Index for the month preceding the relevant Review Date exceeds the Base Figure
1.3 'the Index' means the 'All Items' index figure of the Index of Retail Prices published by the relevant Ministry or Department and any successor thereto
1.4 'the Initial rent' means the sum of £200 per annum
1.5 'Review Date' means each fifth anniversary of the First Review Date
1.6 'a Review Period' means a period beginning on any Review Date and ending on the day before the next Review Date thereafter
2.1 Until the First Review date(25 years) the Rent is to be £100 per annum thereafter during each successive Review Period(each 5 year period starting with the first at Y25-Y30) the rent is to be a sum equal to the greater of the Rent payable under this Lease immediately before the relevant Review Date or the Revised Rent ascertained in accordance with this Schedule

rent is £100 or greater if specified elsewhere

2.2 The Rent for any(first is 25-30) Review Period is to be the Initial Rent(£200) plus the amount which bears the same proportion to the Initial Rent as the Increase bears to the base Figure

specified here the rent is £200 + indexing, at year 25 the base and index month are the same month just before Y25 so zero


2.3 If the reference base used to compile the Index changes after the date of this Lease the figure taken to be shown in the Index after the change is to be the figure which would have been shown in the Index if the reference base current at the date of this Lease had been retained
..."

I can see that there are clear contradictions and yet our ground rent is £72.78 per 6 months. I assume from reading this that it has made a RPI linked increase from an initial ground rent of £100 per year - but correct me if I'm wrong!

davidmcn

getmore4less wrote: »

pretty clear the first review is at 25 years and not 30years.
2.2 The Rent for any(first is 25-30) Review Period is to be the Initial Rent(£200) plus the amount which bears the same proportion to the Initial Rent as the Increase bears to the base Figure

specified here the rent is £200 + indexing, at year 25 the base and index month are the same month just before Y25 so zero

Nope. A Review Period is "a period beginning on any Review Date..."
A Review Date is "each fifth anniversary of the First Review Date", not "the First Review Date and each fifth anniversary of the First Review Date"

So the first Review Period starts at year 30.

It's possible (or even probable) that they intended the rent to go up at year 25, but that ain't what it says.

Jigglebiz

Thanks for further input (this has been really helpful).
It sounds like the main issue is not a concern until year 25-30, rather than a current problem. After I encouraged my sol to read the lease more carefully he has now contacted buyers sol to point out that it is quite clear the current ground rent is (should be) £100.
I understand there is still a lack of clarity about when the ground rent increases. And we are still paying too much currently. But for the purposes of the sale right now, a DoV is not really necessary immediately, is it?

Tom99

Jigglebiz wrote: »

Thanks for further input (this has been really helpful).
It sounds like the main issue is not a concern until year 25-30, rather than a current problem. After I encouraged my sol to read the lease more carefully he has now contacted buyers sol to point out that it is quite clear the current ground rent is (should be) £100.
I understand there is still a lack of clarity about when the ground rent increases. And we are still paying too much currently. But for the purposes of the sale right now, a DoV is not really necessary immediately, is it?

You would think not but if your buyer's solicitor, who will be acting for the buyer's mortgage co says it is, then it is.

Tom99

davidmcn wrote: »

Nope. A Review Period is "a period beginning on any Review Date..."
A Review Date is "each fifth anniversary of the First Review Date", not "the First Review Date and each fifth anniversary of the First Review Date"

So the first Review Period starts at year 30.

It's possible (or even probable) that they intended the rent to go up at year 25, but that ain't what it says.

The First Review Date is not the first review date and the Initial Rent is not the initial rent.

AndyTails

Tom99 wrote: »

The First Review Date is not the first Review Date and the Initial Rent is not the initial rent.

Fixed that for you