freehold/leasehold house Deed of Variation

Imsostressed76

I bought my 1 bed house which was on the market as freehold back in 2006.  Looking at old paperwork, I have a Mortgage Valuation that also shows freehold from 2006.  Now I am selling as need a 2 bed for me and my 4 year old.  It turns out my house is freehold and leasehold which I own both titles to.  I have always paid a service charge to the company as does everyone on on my estate but I have never paid rent or anything to a landlord.  I've never had a tenancy agreement.  Now my buyer wants me to enter into a Deed of Variation at my expense to 'modify the rent charge to remove the powers of enforcement and to provide for notice to be given to the mortgage lender prior to taking enforcement action if someone is in arrears of the service charge' as the buyers insurance will not provide idemnity insurance.  I am really stressed out over this as solicitor said it could be a deal breaker and sale could fall through, in which case I really think I will be stuck in a 1 bed with my child forever as there is so little on the market and it's taken me over a year to sell and find something at the lower end of the market I can afford as a single working parent.  Since my property was under offer and me putting in an offer on a 2 bed, the property prices have risen again so much that I cannot keep up.  Does anyone have experience of this?  I was asked by buyers solicitor why I did not merge titles when I bought house, but my solicitors did not mention this and I bought a freehold house, they asked me to give details of staircasing but I didn't do part buy or part rent, I got a mortgage for the full house price.  I have forms asking me about my rent and landlord and tenants and I can't answer any of these questions as as far as I knew my house was freehold.  My solicitor says that to enter into the Deed of Variation , the management company who I pay my service charge to must agree and she doesn't think they will.  She said my sale is problematic.   Anyone had a similar experience, I so worried about a) sale falling through and b) cost spiralling out of control.  Thanks for reading. 

eddddy

You're muddling a few things in together here. To get stuff resolved, you'll need to address each problem separately.


1. The first thing is the 'Deed of Variation'. In your position, I would start by contacting the Management Company and ask them their policy on 'Deeds of Variation to remove powers of enforcement of rentcharges and/or to give mortgage lenders notice of enforcement'.

And see if they say 'yes' or 'no' or 'maybe'.

Many Management Companies are aware of this issue, and apparently many are prepared to give deeds of variation (if you pay their costs).

You could say to the Management Company that it's a problem for mortgage lenders, but I wouldn't attempt to explain all the other details in your post to them, as that's just likely to create confusion.



2. The next thing is the form - is it called a TA7 leasehold information form?
If so, I expect you were just given this routinely as you have a lease on your house. Check with your solicitor, but I would expect to ignore most of the questions on that form, and just return it to your solicitor saying that the questions are not relevant, as you also own the freehold.



3. Merging the freehold and leasehold titles (i.e. getting rid of the lease) is an extra chunk of work for the buyer's solicitor. The buyer might be annoyed because it will cost them extra legal fees that they did not expect - but it shouldn't be a big deal.

It might be a bigger problem/annoyance if the buyer is using a low-cost 'conveyancing factory'. Often they can only do standard conveyancing - they refuse to do anything non-standard like merging freeholds and leaseholds. But a 'proper' solicitor would do it.