Balcony - Leasehold SO

Geo1122

Thanks for all the tips

Buyer has confirmed in writing with their solicitor that they they are completely fine with the terms in lease re balcony 

Their solicitor still seems to be pushing for a change in lease, deed of variation but seems to say they *may• accept indemnity insurance on this - strongly worded that they really don’t want to. 

My solicitor thinks it’s all overkill and will now look into indemnity insurance as isn’t familiar with doing this for a balcony before so I will wait and see 🤞🏻

Geo1122

My balcony issue is STILL on going. 

My buyers solicitor seems to be insisting on a Deed of Variation and says this is because he is acting on behalf of the mortgage lender. 

My buyer is now offering to pay some of this cost - I have no idea what the cost would be or if this is even an option from the Freeholder.
I also have no idea how long this would take?

I just wanted to see if anyone else had encountered a similar issue of mortgages not being approved when the balcony is not part of the demise of the flat (the leaseholder has exclusive access and is only accessible from the property - first floor flat).
It is a Shared Ownership property. 

Any help much appreciated! 

user1977

Why isn't your solicitor giving you advice about all of this?

Geo1122

The last my solicitor told me was that she would put the indemnity insurance offer to my buyers solicitor. She has said even that was unnecessary, let alone a Deed of Variation. 

The estate agent go between has come back to me today regarding the Deed of Variation being requested and the offer of contributing from my buyer.

But yes I agree my solicitor is severely lacking in communication. 

This is my first time selling so it is difficult to know what is normal in terms of time frames and what they should be doing by when. 

propertyrental

It might be worth instructing your EA to start re-marketing. I suspect getting a Deed of Variation will at best take a long time and at worst will be rejected by the freeholder. That's probably more of an issue than the cost.

Geo1122

Thanks - I suspected a Deed of Variation would be very timely if even considered by the Freeholder. 

Wondered if this is an issue that I will encounter with any buyer so even if I start again I could end up back in this situation or if I’ve just been unlucky with this buyers solicitor.

CGoble

I am having this exact issue right now and I don’t know what to do. I am so in love with this flat. I’ve had my offer accepted for 8 months now. My solicitor has flagged the balcony not being included in the lease with “right to use” it as a legal defect and the landlord is refusing to change the lease. I am getting told by my solicitor that an indemnity isn’t an option as it doesn’t legally suffice and my mortgage lender also won’t accept this lease as it is, so I can’t get my mortgage. I’m absolutely devastated. Surely there is a way to solve this?!

gm0

There is a lot of miscommunication and nonsense with some solicitors over this.  In framing the question and then going down a deed or indemnity channel.  Where the freeholder/MA positon can be anticipated - seller solicitor needs to be instructed to pushback.  Take it as is or leave it.  And don't invent overzealous stuff "on behalf of" the lender.   The answer can be a different solicitor - or in the rare event it has come from a lender staff member - a different lender.

Asking to vary a single lease where all the leases have the same form often gets resisted. It's not a helpful thing overall.   To have pick n mix leases which to some degree contradict each other.  And nobody would have to agree to vary other leases alongside the disputed one to remove rights they currently enjoy. So from the freeholder end its painful and expensive nonsense.

If you demise your balcony upstairs.  Precedent - Now I can partition off a path/patio piece of the garden as in my ground floor flat.  Here is my new fence (that the lease doesn't prohibit - because those bits were all COMMUNAL so a clause about that wasn't needed - and isn't in the 20/40 leases.

The arrangement for communal demised spaces and structure which the indvidual lessees own are usually clear if not always the same across sites.  Windows.  Balcony structures, Paved area/patioish paths and gardens. Can fall either side.  There is no universal declaration I am aware of that definitively one version is a defect to be corrected.  I think you will find varying opinion on it legally.

The value matters - then it not being demised means it isn't part of what you are buying and should not be part of the valuation.  And LTV.  There the matter should really end.

And freeholder communal maintenance is done centrally recharged in shares according to leases 1/n or sizes or whatever - on the one category. 

And just costs specific to the lessee (for demised)

You don't get to haggle about moving these costs and rights across the boundary without changing ALL leases however many.  Saying no - correctly will be the first recourse position of any freeholder.  Unless there is a genuine legal drafting defect which has been well established.  Which requires a painful updating of ALL the leases.

Example - it is often the case that paved areas, paths and outside space is "communal".  And this is deliberate to the form.  It cannot be fenced off, altered by the lessee it is part of the garden owned in common by the freeholder and with restrictions - all resident leaseholders enjoy the use and pay for the maintenance.  Not a private garden.  Communal grounds. Including patio space right outside french doors. And this form with no parcelling off pieces - is entirely deliberate. 

With these patio/ground floor balconies as one example.  Clearly - upstairs structures sometimes fall into the same original drafting.  And cost attribution.  Even if the notion of communal use is entirely notional - there being no access to it and no rights through the demised flat.

There are often restrictions on use of grounds - some in the lease, other created informally with an MA and just communal living "etiquette".   Not sticking your deckchair up one foot outside someone else's lounge window.   Or landing your drone on the communal balcony.  Because you are neighbours who share the outside area - and it would be rude.  Legally they sort of could.  But take it too far a nuisance against "quiet enjoyment" would be created.

A mortgage is against a value for a demised space with communal bits outside it would not normally be a problem other than one of correct valuation to the correct title plan.  Lots of flats like this get conveyanced.

Where balcony structures and ambiguity about ownership arises alongside "difficult" materials. 
This could be a source of great pain on mortgage - fire safety issues with what they are made of - wood balconies found in some older coastal blocks. cladding issues etc.   And ambiguity on liability to resolve.

Those issues are of different form. 

Even then - I still cannot see any advantage in a larger building of having different bits of such a structure with some owned by the freeholder and some by specific leaseholders in an unholy mixture. 

Of existing leases and some Deeds. 

Try getting alignment and bills paid on getting that repaired, painted, rendered, safety checked or fixed.

Something half thought through happens with a specific solicitor - sometimes new to that site.  And the solicitor who did it is applying criteria in an over zealous way and won't back off having raised it and dug in.