Deed of Variation/Mortgage Protection Clause

JustinTime19

I bought a flat in a purpose build building in 2018 (built 2010). I am in the process of selling, and have been advised by the sellers solicitor that the lease wouldn't be acceptable for mortgage companies . As there is no mortgage protection clause in the lease,

Would this have not been an issue when I bought it ? Did my solicitor made an error

Does anyone have experience and idea of costs in resolving this (I have reached out to my freeholder but want to make sure I am not being taken advantaged of ?) and the costs are reasonable.

erdelipeter17

hi 
did you resolve this? 
we sold and was about to exchange when the lender said they wont release the funds until the deed is amended, according to our solicitor this is because the buyer solicitor reported ground rent incorrectly. 

JustinTime19

Hi.

Do you know your ground rent, and the terms for it. 

This link is pretty handy to see what lenders will support, your solicitor maybe able to establish who the lender is. The buyer solicitor for me pressed hard on getting me to change the ground rent within the lease even though it was commonly supported by a number of lenders - they are obviously acting in the interest of their client !

https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/question-list/1852/

My sale didn't ahead in the end (due to buyer's solicitor not informing the buyers mortgage company of building work early in the process). 

Mortgage protection clause would have been resolved by an indemnity policy which your solicitor can arrange - I think mine came in around £600.  Some lenders support this, although from what I understand solicitors try to avoid this and would rather push for the lease to be addressed. 

Hope this helps,

erdelipeter17

Hi Justin 

really good information that, 

i think i found the issue, buyers solicitors reported our ground rent to lender (santander) at £900 per annum. 
it is actually £10 per annum and its £900 service charges, they are now amending with the lender so fingers crossed will all work out! 
Lender was not interested in a indemnity policy