Defective Lease - Deed of Variation, Indemnity Insurance, Stop Process, etc?

AGoodUserName

Morning MSE-ers!

CONTEXT: 

I am in the process of purchasing a leasehold flat in England for < 300k. This is the 3rd property I have been in the process of purchasing (the previous two fell through for cladding related issues), which as a FTB has made me lose a bit of hope —clarifying this to explain why I really want this purchase to work.

My solicitor has been reviewing the lease for this leasehold property and has pointed out the following issue: 

• "[The solicitor says] We would also normally expect the Lease to contain a covenants on the Landlord for the enforcement of covenants on the other Tenants if required and to carry out the obligations of the Management Company should they fail to do so which it does not. As such we have requested the seller take out defective lease insurance to protect you against risks associated with the defect(s) in Lease. While this will not amend the defect within the Lease itself, this indemnity may cover the costs that can arise from these defect(s)."

During a conversation with my solicitor to discuss this issue, they highlighted that the indemnity policy will not really cover me and that I could face issues, given the defective lease, when it comes to either remortgaging or selling the property in the future (it is not clear to me why indemnity insurance was suggested in the first place, given it seems to be a non-starter). 

Based on this conversation, my solicitor went back to the freeholder (via the seller's solicitors) and advised that we seek a deed of variation. The seller's solicitors have now advised that the landlord will agree to the following variation:  

• “The Landlord covenants that if during the Term the [Management Company] shall for a period of twenty-one days fail or neglect to perform and observe its obligations or any of them hereunder or shall go into liquidation or otherwise cease to exist then it shall be lawful for the Landlord to undertake (or by action or otherwise compel the [Management Company] to undertake) their obligations and shall be entitled to recover from the Tenant a due proportion of all money costs charges and expenses incurred by the Landlord in connection therewith.”   

My solicitor has advised that this does not cover the request to have the Deed amend the ground rent nor does it include the covenant to enforce the covenants on the other leaseholders as requested in our initial request.

QUESTIONS: 

Based on the above, I have a couple of questions that I can’t seem to get a straight answer to from anyone (incl. my solicitor): 

1. Does the proposed DoV sufficiently address the issues that make the lease defective? 
2. Bearing in mind the proposed DoV wording, would an indemnity insurance be relevant now? 
3. If I were to purchase either (a) with the DoV as it stands or (b) with the DoV as it stands + indemnity insurance, would I / could I still struggle to remortgage or sell in the future? 
4. Is there anyone I could go to for professional advice on this? My solicitor has been absolutely terrible 
5. Any advice as to how to deal with this?

If anyone has any experience or advice with this or a similar situation I would be incredibly grateful. As a FTB I have no sense of whether this is a complete deal-breaker or whether there are ways around it.

Thanks in advance,

A very stressed FTB

Mark_d

I think  your solicitor's advice is spot on!