Deed of variation for rent charge.

Troy_af

Hello.

Long story short I am looking to buy a property on a new estate which is subject to an estate rent charge. Things are not really going well as I am now 5 month in from the offer being accepted and still no further forward. Turns out my lender may require a deed of variation, as section 121 of the law of property act has not been removed from the TP1. For those unaware this means that a lease can be put on the property and repossession taken if fees to the management company are unpaid for 40 days, a common problem now with many freehold new builds across the country I've learnt, hence the term "fleecehold".

In addition to this after 3 month of non payment the rent charge owner can enter the property and "hold the property", until all fees are recovered. This part I don't really understand fully. Does this mean that even if I had the section 121 powers removed (as most lenders require), that repossession could still be taken unless I have this 3 month clause removed from the TP1 as well?

Ultimately I have decided that regardless of what the lender requires (since their requirements will most likely only protect themselves), I am going to request a deed of variation myself. I will require that the rent charge owner has no power whatsoever to put a lease on the property or to reposses the property. I think my chances are slim, but that being said I know that it is now becoming much more common for these powers to be removed from deeds, so maybe I stand a chance. Either way if it doesn't happen then I'll be walking away.

My question is what exactly should the deed of variation include and how should it be written? I was hoping that someone may have a deed of variation example, since apparently this is now very common issue. Also is this something that is usually accepted by the rent charge owner?  Any other advice would be appreciated.. timings and costs for deed of variation etc.

Thanks for any help.

Doorlock21

Troy_af said:

Hello.

Long story short I am looking to buy a property on a new estate which is subject to an estate rent charge. Things are not really going well as I am now 5 month in from the offer being accepted and still no further forward. Turns out my lender may require a deed of variation, as section 121 of the law of property act has not been removed from the TP1. For those unaware this means that a lease can be put on the property and repossession taken if fees to the management company are unpaid for 40 days, a common problem now with many freehold new builds across the country I've learnt, hence the term "fleecehold".

In addition to this after 3 month of non payment the rent charge owner can enter the property and "hold the property", until all fees are recovered. This part I don't really understand fully. Does this mean that even if I had the section 121 powers removed (as most lenders require), that repossession could still be taken unless I have this 3 month clause removed from the TP1 as well?

Ultimately I have decided that regardless of what the lender requires (since their requirements will most likely only protect themselves), I am going to request a deed of variation myself. I will require that the rent charge owner has no power whatsoever to put a lease on the property or to reposses the property. I think my chances are slim, but that being said I know that it is now becoming much more common for these powers to be removed from deeds, so maybe I stand a chance. Either way if it doesn't happen then I'll be walking away.

My question is what exactly should the deed of variation include and how should it be written? I was hoping that someone may have a deed of variation example, since apparently this is now very common issue. Also is this something that is usually accepted by the rent charge owner?  Any other advice would be appreciated.. timings and costs for deed of variation etc.

Thanks for any help.

Did you ever get this sorted?