We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
PLEASE READ BEFORE POSTING: Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.
Lender refusing to sign deed of covenant from management company
Julw
Posts: 5 Forumite
Hi,
Looking for some help and advice please. Currently in the process of purchasing a freehold property. Mid way through the process i found out there is a management company involved. My lender won’t sign their deeds of covenant and the management company informed solicitor they won’t proceed without this. Anyone had a similar experience?
Looking for some help and advice please. Currently in the process of purchasing a freehold property. Mid way through the process i found out there is a management company involved. My lender won’t sign their deeds of covenant and the management company informed solicitor they won’t proceed without this. Anyone had a similar experience?
0
Comments
-
A lender isn’t taking title - why would they need to enter into a deed of covenant? What does the deed relate to?0
-
You've got two choices...
1. Find another lender who will.
2. Walk.
They want the lender to agree to act as guarantor for any unpaid service charges, under the assumption the debt would then be added to the OP's mortgage?SmashedAvacado wrote: »A lender isn’t taking title - why would they need to enter into a deed of covenant? What does the deed relate to?0 -
The MC has the rights embedded in the law of property act which ensure that service charges bind the property - they have remedies to make the owner bankrupt and force a sale to a buyer who will be liable to pay. The MC doesn’t need the lender to be liable and asking them to be on the hook is neither market practice nor reasonable0
-
The MC has the rights embedded in the law of property act which ensure that service charges bind the property - they have remedies to make the owner bankrupt and force a sale to a buyer who will be liable to pay. The MC doesn’t need the lender to be liable and asking them to be on the hook is neither market practice nor reasonable0
-
This is now becoming a problem with what is termed a fleecehold property - i.e. a house that is advertised as freehold (free from hold) but actually isn`t. More and more lenders are refusing to lend on these types of properties as the management company has rights over the lender.
People who have bought these types of fleecehold properties are finding more and more that if/when they want to sell, they have problems due to the same issues you are encountering.
Are you aware of exactly the ongoing costs that you would be signing up to with regards to service/estate charges/permission fees etc.
If a new estate, are the council adopting the estate and if so do you have this in writing? If they don`t (and more and more cash strapped councils are opting out), it will be up to the owners to pay for anything from drains to open spaces, roads, playgrounds etc. As well as full council tax.
Make sure your solicitor fully informs you (and use an independent one - not linked to the developer if buying new build as they will not be transparent as to the true ongoing financial burdens.0 -
Check here for any more advice/information
https://www.facebook.com/groups/nationalleaseholdcampaign/0 -
That isn't actually what freehold means...michelle230 wrote: »i.e. a house that is advertised as freehold (free from hold)
https://www.etymonline.com/word/freehold"landed estate in possession of a freeman," late 15c., later generalized to any outright ownership of land, a translation of Anglo-French fraunc tenement; see free (adj.) + hold (n.1).
"Fraunc tenement" goes back to at least the latter stages of Norman rule.0 -
[/B]That isn't actually what freehold means...
https://www.etymonline.com/word/freehold
[B]"Fraunc tenement" goes back to at least the latter stages of Norman rule.
I`ll bow to your superior knowledge Adrian:) but the end result is the same. Most people think freehold means they are in financial control of their own home. Sadly many only realise too late that their home is being monetised as someone else`s investment
0 -
They are.michelle230 wrote: »Most people think freehold means they are in financial control of their own home.
...bothering to understand what they're buying would have been a good idea.Sadly many only realise too late that...0 -
They are.
Try telling that to people who have had to pay a "permission" fee of £60 to change their own front doorbell. Or to the people who have had to pay a "permission" fee of £500 to build a shed in their own garden.
...bothering to understand what they're buying would have been a good idea.
...bothering to understand what they're buying would have been a good idea.[/QUOTE]0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 349.9K Banking & Borrowing
- 252.6K Reduce Debt & Boost Income
- 453K Spending & Discounts
- 242.8K Work, Benefits & Business
- 619.6K Mortgages, Homes & Bills
- 176.4K Life & Family
- 255.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 15.1K Coronavirus Support Boards