Leasehold act 2022 preventing deed of variation

Edinburghrich

In the process of selling my flat, but discovered there is a mistake in the leasehold plan. Flat is a maisonette as specified in deeds, but leasehold plan only mentions one level, so needs to be changed to align with deeds. However Freehold agents refusing a deed of variation because it would trigger the 2022 leasehold act and their client would lose the ground rent payments £150 pa. Apparently 2022 act indicates that a 'new' lease would reduce ground rent to peppercorn level. Deed of rectification might sort this, but not necessarily as may also trigger the act. Anyone else encountered this?

Jonboy_1984

What is the remaining lease length as an extension (complete with premium to compensate for ground rent) could possibly get around it. 

silvercar

Edinburghrich said:

In the process of selling my flat, but discovered there is a mistake in the leasehold plan. Flat is a maisonette as specified in deeds, but leasehold plan only mentions one level, so needs to be changed to align with deeds. However Freehold agents refusing a deed of variation because it would trigger the 2022 leasehold act and their client would lose the ground rent payments £150 pa. Apparently 2022 act indicates that a 'new' lease would reduce ground rent to peppercorn level. Deed of rectification might sort this, but not necessarily as may also trigger the act. Anyone else encountered this?

The solicitor you used when you bought should have spotted this. I’d consider contacting them and seeing if they will pay the cost of putting it right,

EssexHebridean

silvercar said:

Edinburghrich said:

In the process of selling my flat, but discovered there is a mistake in the leasehold plan. Flat is a maisonette as specified in deeds, but leasehold plan only mentions one level, so needs to be changed to align with deeds. However Freehold agents refusing a deed of variation because it would trigger the 2022 leasehold act and their client would lose the ground rent payments £150 pa. Apparently 2022 act indicates that a 'new' lease would reduce ground rent to peppercorn level. Deed of rectification might sort this, but not necessarily as may also trigger the act. Anyone else encountered this?

The solicitor you used when you bought should have spotted this. I’d consider contacting them and seeing if they will pay the cost of putting it right,

They would also have sent the plan to the client for checking too though… 

Richard1212

It is my understanding that the freeholder is not legally obliged to agree to a deed of variation. But If your freeholder refuses to grant a deed of variation, or the terms they propose are unreasonable, then you can potentially use the ‘statutory lease extension’ route as your back-up plan.
Discuss the statutory lease extension with your solicitor and see if it is a possibility in your circumstances. I think it is the only way of getting a deed of variation without freeholders permission and involves certain legal complexities. Other than that, I believe that you are stymied   

eddddy

You could ask your freeholder how much compensation they want (i.e. what lump sum they want) in exchange for losing £150 ground rent per year.

If the freeholder follows the guidelines used for lease extensions, they would want somewhere between £2k and £2.5k - plus the legal costs.  But in reality, they could ask for amount they like.

Then there's the question of who pays the £2k to £2.5k - the seller or the buyer. (It's the buyer who benefits, but maybe they don't have a spare £2.5k in cash.)