Indemnify policy on leasehold house

Karr55

GDB2222 said:

Nobody has mentioned buying the freehold. . 

The freehold has recently been sold to a new freeholder. I am used to paying a nominal £2 a year so this is all new to me. 

eddddy

Karr55 said:

GDB2222 said:

Nobody has mentioned buying the freehold. . 

The freehold has recently been sold to a new freeholder. I am used to paying a nominal £2 a year so this is all new to me. 

You could probably 'compulsorily purchase' the freehold at some point if you wanted to - then the ground rent would disappear. 

Based on the ground rents that you mention, the freehold should cost about £2.5k to £3k. (Plus fees which might add another £2k to £4k).


You might have to wait 2 years until you are eligible to 'compulsorily purchase' the freehold - but there's probably no rush to do it.


(If you were in a rush, you can ask the seller to start the freehold purchasing process - so you don't have to wait 2 years.)

Karr55

Update - a deed of variation has been offered for £700 but the sellers don’t want to pay it. 

eddddy

Karr55 said:

Update - a deed of variation has been offered for £700 but the sellers don’t want to pay it. 

What would the deed of variation say?

(Just to clarify - a deed of variation changes something in a lease. So you need to find out would be changed. i.e. What it says at the moment, and what it will say when it's changed.)

Karr55

eddddy said:

Karr55 said:

Update - a deed of variation has been offered for £700 but the sellers don’t want to pay it. 

What would the deed of variation say?

(Just to clarify - a deed of variation changes something in a lease. So you need to find out would be changed. i.e. What it says at the moment, and what it will say when it's changed.)

Mortgage protection clauses - This clause typically ensures that a landlord must notify a lender if they plan to forfeit a lease and repossess a property when, for example, the leaseholder has breached the terms of the lease. This allows the lender to liaise with their borrower in good time, protecting their investment by ensuring any breach is remedied before forfeiture takes place. 

There isn’t one at the moment and the freeholder has offered to add it with a legal fee of £700 which the lender doesn’t want to pay. 

eddddy

Karr55 said:

Mortgage protection clauses - This clause typically ensures that a landlord must notify a lender if they plan to forfeit a lease and repossess a property when, for example, the leaseholder has breached the terms of the lease. This allows the lender to liaise with their borrower in good time, protecting their investment by ensuring any breach is remedied before forfeiture takes place. 

There isn’t one at the moment and the freeholder has offered to add it with a legal fee of £700 which the lender doesn’t want to pay. 

Is that what your solicitor said?  Or is that something you googled?  It's what your solicitor said that is important. So, it seems...

• it's not an issue of ground rent potentially going over £250.

• The real issue is the lack of a mortgage protection clause.

That's not relevant to you, as you won't have a mortgage. But it might be relevant to whoever you sell to, if they need a mortgage.


The problem with ground rent over £250 might go away, if/when the government change the law. But the mortgage protection clause issue probably won't go away.

So if the freeholder is offering a deed of variation, it's probably sensible to take it. It's just a case of negotiating over who pays for it.






Edit to add...

In case you were confused by my question... there are many reasons that you might want to vary a lease.

I was asking which specific reason applied in your case. (You've now explained that it's lack of a mortgage protection clause in the lease.)


Similarly... there are many reasons why you might want indemnity insurance.

So it's important to know which specific reason applied in your case. (You've now explained that it's lack of a mortgage protection clause in the lease.)


I think your initial comments about ground rent sent people off in the wrong direction.