Waiting for a response from the freeholder to amend lease

messyjessy7

We have found a flat to buy in London, and our solicitor has asked the seller’s solicitor/seller/freeholder to amend the lease. This is because the ground rent rises every 5 years in line with RPI, and it seems that all lenders have a policy where it needs to a minimum of 10 years, therefore we need the lease to be adjusted before we can even proceed any further.

It’s been two weeks now, and our solicitor has said “The landlord has no compulsion to reply quickly.”

Has anyone been through this before? How long did you have to wait to hear if the freeholder was happy to amend? How long did the process take from start to finish?

penners324

A lease amendment can take months and cost a lot in solicitors fees.

It's done by a Deed of Variation.

The seller really needs to get this resolved before marketing the property.

You should continue looking for other properties 

eddddy

messyjessy7 said:

Has anyone been through this before? How long did you have to wait to hear if the freeholder was happy to amend? How long did the process take from start to finish?

I don't think you can really generalise about landlords/freeholders and how long they might take to reply to requests, etc.

I dealt with a landlord/freeholder who never replied to letters about anything. 

I dealt with another landlord/freeholder who would reply quickly but was completely clueless about everything to do with leases, so their replies were unhelpful.


The best plan might be to ask the seller to try to contact their landlord/freeholder and get a feel for whether they're likely to agree or not.



If the landlord/freeholder replies and is agreeable, there might then be a negotiation about how much money the landlord/freeholder wants for doing this - this might take a long time or it might not, depending on how reasonable both sides are being.


Once everything is agreed - the legal stuff (amending the lease) could be done quite quickly.

NameUnavailable

The freeholder doesn't have to amend the lease. If they do agree, they will be asking ££££'s to do so plus legal fees. Is your seller willing to foot the cost?

It's their problem because they will find it very difficult to sell unless they resolve this issue (but might not realise it yet).

As someone else has suggested I would also keep looking at other property in case this one has to fall through.

saajan_12

messyjessy7 said:

We have found a flat to buy in London, and our solicitor has asked the seller’s solicitor/seller/freeholder to amend the lease. This is because the ground rent rises every 5 years in line with RPI, and it seems that all lenders have a policy where it needs to a minimum of 10 years, therefore we need the lease to be adjusted before we can even proceed any further. - not an inherently unreasonable clause, as its still inflation linked and the increased level after 10 years is still the same, just that you start paying some of the increase after 5 years. The frequency of increases should only really matter when its a fixed increase eg doubling. However it seems more lenders are getting scared of any mention of a frequent rent change, even if by a reasonable amount. 

It’s been two weeks now, and our solicitor has said “The landlord has no compulsion to reply quickly.” - well that's true, and will continue to cause delays if the LL isn't interested. Can you / seller offer them a juicy fee to get things moving?

Has anyone been through this before? How long did you have to wait to hear if the freeholder was happy to amend? How long did the process take from start to finish? - 

Unfortunately the LL has no interest in the sale and no need to act faster. Options are
* you or seller offer the freeholder a juicy fee to respond / agree to the revision
* find broker to find another lender who's happy with more frequent inflationary increases 
* find another property

messyjessy7

Thanks so much for the advice everyone.

That's the thing, as we have heard nothing, we are unsure what/if the conversations are happening between the seller and the freeholder? Our solicitor is reluctant to chase because as you all mentioned, the freeholder has no obligation to reply back quickly.

We have been keeping an eye on the market but there's nothing that we really like at the moment. However, we will continue to look. 

jonnnyash

I would urge you to reconsider buying a flat which has a lease with a ground rent linked to RPI at all.  Just look at inflation now!  I believe mortgage lending criteria are getting stricter and stricter over time.  You don't want to risk not being able to sell the flat in the future (or at least not without having to do so at a large discount to a cashbuyer).

messyjessy7

Many of the flats we have looked at are either linked to RPI or doubling, but we are still finding a property in the meantime. Hopefully the Government's Leasehold Reform (Ground Rent) Act 2022 will extend to more than just new builds asap.