Landlord wants £1248 to add a Mortgage Protection Clause

Lofty65

Hi All, I am re mortgaging my flat that I have owned for 5 years without the above clause applied with my current lender. The new lender wants it adding, although the rent is only £250 a year and is a residential flat of 20 within the block. Firstly, based on the fact that it is a re mortgage of less than 50% equity, there are no completion requirements form the landlord, the ground rent is only £250, should the mortgage company be applying this in the first place. Secondly, can the Landlord really charge that much to add a clause saying he'll advise the lender if there's a forfeit! Thirdly, is there any other option that we can pursue? 
Thanks

Mark_d

I have owned (with mortgage) leasehold flats for the last 20 years and I have never had a lender asking for such a clause.  Does your new lender have reason to believe the landlord might terminate your lease early?  If not then I would ask the lender to pay the fee, or go approach another lender for the remortgage.

prowla

Sounds like a money-making scheme to me!

NameUnavailable

Your ground rent is currently £250 but does it say in the lease if it is set to increase in the future? If so when and by how much?

propertyrental

Why did your broker recommend this lender?

Lofty65

hi, there is no increase scheduled at all and we have records of payment for 5 years rent with no issues! My solicitor is insisting on it too, or he’s pushing the lender!! 

JustinTime19

Hi. 

This issue came up when I was looking to sell - I had owned my property for 5 years.

Do you know if during the original sale this got highlighted to you as an issue with the lease. In my particular case the wording suggested that if I defaulted on my ground rent they could seize the property and the mortgage company wouldn't have been made aware of this.

I raised this with my original conveyancer as an issue as at the time this wording would have been an issue for mortgage companies. While they didn't admit liability, they agreed to cover the cost of an indemnity policy.

If your original conveyancer has made an error - I would pursue them to address this at their cost.

GDB2222

Is the landlord required to agree to the new clause at all? If not, I guess they can charge as much as they want?

m0bov

Its the Freeholder, they don't have anything to do with the mortgage. Unless you are on some sort of shared ownership thing? Is this rent or ground rent?

penners324

Sounds like a deed of consent to adjust the lease.

The £1495 is likely to be the landlord's legal fees for this.

You need to be clear as to what is happening. If it's thus then that's a plausible amount, quite high though.

It's likely the flat is unmortgageable, thus unsellable without the lease change.

user1977

m0bov said:

Its the Freeholder, they don't have anything to do with the mortgage.

But the point is the mortgagee would like to be involved, if the freeholder is considering forfeiture of the lease.