Deed of Covenant - Mortgage Issue?

Tatters26

I've had a mortgage approved for a property we've had an offer accepted on, and currently jumping through the hoops and not far from exchange I'm told. However my solicitor has said that the property has a deed of covenant, and not all mortgage lenders will allow this. He's contacted them directly to confirm their mortgage offer to us still stands and it's got me worried.

Has anyone else have an offer retracted as the deed of covenant is unattractive to the lender? My lender is Kent Reliance

nyermen

Any details on what the deed of covenant is?   In a leasehold I think it could be just to pay the ground rent etc.
Freehold I might be more concerned as it may be estate rentcharge or similar (which indeed, lenders dont like due to the rent charge leasehold risks)

What it covers will determine whether the mortgage lender will lend or not.

Tatters26

This is the email from our solicitor to us:

“I have also written to your lender and advised them of the wording of the covenant within the Transfer Deed from November 2020 whereby there is prohibition on making any alterations or additions to the property without the written consent of London & Quadrant Housing Trust (such consent not to be unreasonably withheld). I advised them that a future buyer or lender may deem this to be overly restrictive and have asked for their specific confirmation that they are happy to proceed with their offer in light of this.”

MWT

I understand why the solicitor had to raise it, but I'd be surprised if the lender was worried about it as it isn't uncommon to see something like this on recently built estates.

user1977

This is the sort of non-advice which the lender is likely to chuck back at the solicitor i.e. "you're meant to be providing us with advice - do you think we should lend or not?".

Irrespective of what your solicitor has (not) advised the lender, what advice have they given you about it?

Tatters26

funny you say that.. our solicitor told me that they'll likely ask for his thoughts and advice. I thought that was the oddest thing I had heard! Shows how green I am, I'm a FTB and no clue on such things

Tatters26

user1977 said:

Irrespective of what your solicitor has (not) advised the lender, what advice have they given you about it?

He's told us it's nothing to worry about in terms of purchasing the property, and if asked, will tell the lender the exact same thing. It's just annoying when you think the mortgage is done and ticked off, and then 3 weeks later it rears its head again!

MWT

None of this really should have reached your level of attention, the solicitor should have made his report to the lender along with the covenant details and the advice that there was nothing to worry about in it.

Should only have raised it with you to make sure you were aware of the covenant, not to suggest it might be a problem for the lender.

Tatters26

My solicitor has 18 months experience, and my colleague at work (when I've mentioned stuff with him) has told me that my solicitor is an over-sharer! I've had nothing but worry all the way through this as a FTB and things like this, sometimes ignorance is bliss.

user1977

MWT said:

the solicitor should have made his report to the lender along with the covenant details and the advice that there was nothing to worry about in it.

If it's nothing for the lender to worry about, there is no need to mention it to them at all. Lenders only want to know about things which are actually a problem (or inconsistent with their instructions).

[Deleted User]

user1977 said:

MWT said:

the solicitor should have made his report to the lender along with the covenant details and the advice that there was nothing to worry about in it.

If it's nothing for the lender to worry about, there is no need to mention it to them at all. Lenders only want to know about things which are actually a problem (or inconsistent with their instructions).

Its possible that the CML is silent on Kent's instructions for this particular issue so the solicitor may be unable to take the initiative on it