Balcony - Leasehold SO

Geo1122

Grateful for any advice….
in the process of selling my leasehold SO flat and there are queries from buyers solicitor regarding the balcony. 

The property is a purpose built block of flats (about 15 years old) all with same layout and each property has a balcony. This can only be accessed from the property. 

The balcony is owned by the freeholder and the leaseholder has exclusive access. 

The buyers solicitor is not happy with this and trying to get a deed of variation. 

Was never an issue when I purchased the property - was a couple of years old and the standard lease of a large developer. 

Has anyone else experience a similar issue??

Mark_d

My understanding is that as a leaseholder, you own the lease for exclusive use of the flat, the allocated parking space and the balcony.  The freeholder actually owns all these things but you have rights under the lease.

It sounds absurd that the buyer wants to own the balcony given that the every other part of the development is owned by the freeholder

propertyrental

If the lease makes clear that access to the B is limited to the leaseholder, the only other potential issue might be maintenance.

It could be solely the leaseholder's responsibility to maintain, repair etc, but if the freeholder owns it, it is more likely the freeholder's responsibility, probably with costs shared between all leaseholders.

And that (latter) responsibility is probably reflected in all the leases. If the lease were varied just for this flat (which the freeholder is unlikely to agree to) the leaseholder could find themselves liable for all costs associated with their B, plus a share of the costs for all Bs!

But that's a lot of guesswork without have seen the lease......

Olinda99

Mark_d said:

My understanding is that as a leaseholder, you own the lease for exclusive use of the flat, the allocated parking space and the balcony.  The freeholder actually owns all these things but you have rights under the lease.

It sounds absurd that the buyer wants to own the balcony given that the every other part of the development is owned by the freeholder

I am guessing that the balcony is not on the lease i.e the flat is on the lease but the balcony is not even though the only person who can access it is the leaseholder.

I have a flat with a nice patio area outside that can only be accessed by me and that is not on the lease.

eddddy

Mark_d said:

My understanding is that as a leaseholder, you own the lease for exclusive use of the flat, the allocated parking space and the balcony.  The freeholder actually owns all these things but you have rights under the lease.

It sounds absurd that the buyer wants to own the balcony given that the every other part of the development is owned by the freeholder

I suspect the flat is demised to the leaseholder (so in everyday terms, people would say that the leaseholder owns the flat - for the period of the lease)

But the balcony is not demised to the leaseholder - but the leaseholder has exclusive use of it.

However, it seems that the buyer wants the balcony demised to the leaseholder.


(FWIW, often parking spaces and gardens are not demised to leaseholders either. But a leaseholder might have exclusive use of a garden or a parking space.)

Geo1122

Thanks for all of your help with this - who knew it would be so complicated 🤯

my buyer is happy with the arrangement but it seems their solicitor is not - and it may cause issues with the buyers mortgage. 

My solicitor isn’t the most communicative, but from what I understand they are suggesting indemnity insurance on this rather than going down the Deed of variation route that the buyers solicitor wants. 

I agreed their offer in March so would like to finally get all this tied up asap - can’t believe the issues the balcony is causing when compared to when I purchased the property! 

loubel

Presumably the issue is that they don't have access rights in the lease? A Deed of Variation would be the ideal and a reasonable request to resolve the issue but, if the buyer and their lender aren't concerned that the freeholder might decide to block their access in the future, an indemnity policy should suffice. The lender might want to check whether the valuation is affected before agreeing to this though.

If they want to own the balcony then that's an unreasonable request.

user1977

What exactly do they think the risk is?

Geo1122

I really don’t understand why this has become so difficult for my buyers solicitor - and my solicitor doesn’t explain this either. I will chase.

Is anyone familiar with this situation affecting a buyers mortgage approval?
 

There is really no way the freeholder will block access. It’s a first floor apartment and the balcony is only accessible from my lounge. 

The development has about 50 properties that all have exactly the same layout - which I naively thought was all quite straightforward! 

user1977

Geo1122 said:

Is anyone familiar with this situation affecting a buyers mortgage approval?
 

It's really up to the buyers' solicitor (assuming they're also acting for the lender), not the lender themselves. They rely on the solicitor to deal with any title issues.

bouicca21

Surely OP needs to go back to his own solicitor and ask them to find out exactly what the problem is? Only then can anyone advise on a solution.