Selling Freehold with Estate Mgmt Fee attached - Deed of Variation - Any experience?

FrugalYorkshireman

HI all

First time poster on here, looking for any advice or for people to share their own experience. 

I am currently in the process of selling my property which is freehold but on an estate with an estate mgmt fee. 

The buyers solicitors have asked us to liaise with the owner of the common areas to see if they will enter into a deed of variation which will amend the original transfer to state that Section 121 rights are excluded.

My Solicitors have approached the management company to see if they will agree to the Deed of Variation (see the initial response below)

My solicitors have also stated there is also the option of indemnity policy which would cover a mortgage lender only for defending any action taken against them. 

Response from the Estate Mgmt Company: 

Please note that XXX (Estate Mgmt Company name) fees for the initial review and admin of the document are, £50.00 Incl. of VAT – however, if our client, upon receiving such Deed, required the opportunity to take legal advice on the contents written within, fees can vary for such legal advice, in which your client would be liable; this will be advised prior to instructing external solicitors. 

Should the Director wish to seek legal advice this may prolong the process, please be advised we unable to provide time frames in this instance due to this being an external party. Upon payment of our fees and any additional legal fees, the Director is not legally obligated to sign the document. We will keep you updated with every contact we receive.

 My Solicitor has said they are unable to provide a quote for the cost for the variation of deed.

My question to you guys is...
Does anyone have experience of going through similar and importantly what were the costs for a Deed of Variation?

A neighbour recently moved onto my estate and said that the Indemnity policy their seller took out was £140 and their mortgage provider  accempted this.

Thanks all for the help

eddddy

FrugalYorkshireman said:

My Solicitor has said they are unable to provide a quote for the cost for the variation of deed.

Do you mean your solicitors said they are unable to provide a quote for a cost for drafting a Deed of Variation?  i.e. They're refusing to do it?

If so, why? Are they a 'proper' full service solicitors, or more of a 'conveyancing factory'?



Essentially, it sounds like the management company are saying "If you want a Deed of Variation, send us a draft of the deed you want, and we'll show it to our solicitors and ask for their advice."

But if your solicitor won't draft a deed, you're a bit stuck!

FrugalYorkshireman

eddddy said:

FrugalYorkshireman said:

My Solicitor has said they are unable to provide a quote for the cost for the variation of deed.

Do you mean your solicitors said they are unable to provide a quote for a cost for drafting a Deed of Variation?  i.e. They're refusing to do it?

If so, why? Are they a 'proper' full service solicitors, or more of a 'conveyancing factory'?



Essentially, it sounds like the management company are saying "If you want a Deed of Variation, send us a draft of the deed you want, and we'll show it to our solicitors and ask for their advice."

But if your solicitor won't draft a deed, you're a bit stuck!

Hi

There exact wording is " we cannot give a definitive fee for this."

eddddy

FrugalYorkshireman said:

There exact wording is " we cannot give a definitive fee for this."

It's hard to tell what they're referring to from that brief snippet.

But I think I might understand your original question now.

I think you're saying that your solicitor won't charge a fixed fee for dealing with the deed, they want you to pay their hourly rate instead. And you're wondering how much that's likely to add up to.


I guess it depends how many times the draft deed goes backwards and forwards for changes. For example,

• If your solicitor drafts the deed, and the management company's solicitor immediately agrees with it - it's relatively quick and simple and cheap.

• But if the management company's solicitor requests changes, but your solicitor doesn't like the changes and requests different changes - it could go round in circles for a long time, and get expensive.

I guess you could push your solicitor for more info on costs. For example, would they quote a fixed fee for drafting the Deed? How much is it likely to cost for each revision of the deed?


(But I'm half guessing all of the above based on very limited information. Maybe check with your solicitor what they mean.)

Racky_Roo

The management company can charge anything they like to review and then (hopefully) agree to a deed of variation, there's been multiple threads on this recently if you search

Just because the new persons mortgage co accepted an indemnity policy, doesn't mean your buyers mortgage co will so that's not always an option, for me, my buyer wouldn't accept an indemnity as they said then they'd have an issue when they came to sell.

FrugalYorkshireman

Thanks both, 

Yeah I think I need to push my solicitors for more information on costings and the alternative option of indemnity insurance and whether this would be accepted by the buyers & buyers mortgage providers. 

Had seen other posts, was hoping people were able to give rough figures in terms of costs from their experiences.

Cjrt040

Hi
Sorry to resurrect the thread... what was the outcome of this? @FrugalYorkshireman

My only advice to anyone reading this in future would be to avoid newbuilds setup in this manner. Ive paid out around £800 in "Admin fees" and the like to have documents changed for the sale of my property. This is without the Deed of Variation our buyers solicitor is requesting. 

Thanks!

andyf1980

Cjrt040 said:

Hi
Sorry to resurrect the thread... what was the outcome of this? @FrugalYorkshireman

My only advice to anyone reading this in future would be to avoid newbuilds setup in this manner. Ive paid out around £800 in "Admin fees" and the like to have documents changed for the sale of my property. This is without the Deed of Variation our buyers solicitor is requesting. 

Thanks!

Yes, our experience too. It’s a racket!

hopingtomove

Hi, I am going through the buying process and my solicitor is refusing the offered indemnity as he says it will make the property hard for me to resell. He is holding out for a deed of variation, advising me to pull out if one is not granted. Did you get your deed of variation? How much did it cost you? Was the cost split between seller/buyer? An update would be really helpful. Many thanks. 

mayank82

Hi all,
I think this is the right place to post this query.
I am looking to buy a 6yr old freehold property but it has an associated maintenance charge entitlement in title.
The charges are listed in the title as management charges and not Rent charge but our solicitors are saying the property management company can construe them as rent charges at any point in future hence DOV is best option.
However , we are Facing  issue with DOV with s121 exclusion. Property management company are refusing to exclude section 121.!!  Can you kindly advice our options

sozzygee

Wonder if anyone can help? We're looking to buy a freehold property with Section 21 excluded. Our lender is happy with this, but we are worried that we may have problems in the future if we come to sell, if a different lender took a different view. Has anybody else had any experience of this please?