Deed of variation help

shazk85

Has anyone had to deal with Deed Variation?

I completed and moved into my new build December 2022 then in June this year I had email from my solicitor saying The developer wanted to vary the provisions of the transfer deed I and others on the development entered into when purchasing the property (when I brought and signed contract was £100 year service charge for communal green and parking upkeep) but apparently their solicitor didn't picked up there was a mistake and the wording for the service charge for communal and visitor parking spaces wording was missing and they actually want it as management company!

My solicitor is saying that I don't have to but they cant say what the repercussion will be if I choose not agree to the management company.... , I don't see how when I have signed a contract they can make me change now, I would never of brough a house with management company as had flat with one previously as was a nightmare?

Any advise or who I can speak to as my solicitor seems a but clueless and just told they never come across this before...

ciderboy2009

Did you use a "real" solicitor company or a conveyancing company?

If the former then I would assume that they're not giving you any advice because you're not paying for it.  Have you tried asking them how much they would charge to advise you/ inform you of all of the legal ramifications?

If the latter then it's probably something they've never come across before - try contacting a "real" solicitor company.

daveyjp

Once a management company is involved the cost will increase, someone has to pay for their services and your rights to challenge the management fee charges are extremely limited.

https://www.bbc.co.uk/news/articles/c978jqvjzvlo

Question is who is doing the maintenance now?

eddddy

As above, you'd probably have to pay a solicitor for advice on this.

You could try saying to the developer something like -

I need to take advice from a solicitor before agreeing to this, please confirm that you will cover the costs. Obviously the solicitor's advise might be to sign or not to sign.


Essentially, you would sign if it is beneficial to you, or not sign if it's detrimental to you.

shazk85 said:

when I brought and signed contract was £100 year service charge for communal green and parking upkeep
...

 I would never of brough a house with management company as had flat with one previously as was a nightmare?

If you've agreed to pay a service charge to a company to manage the communal green and parking - essentially you've agreed to pay a management company.

How else did you expect the upkeep of communal green and parking would be carried out?

What is it that you don't like about the new set-up that's being proposed?



(BTW, £100 might be the service charge for the first year or two on a new build estate, but that's very likely to increase over the years as more maintenance work becomes necessary.)

user1977

shazk85 said:

The developer wanted to vary the provisions of the transfer deed I and others on the development entered into when purchasing the property (when I brought and signed contract was £100 year service charge for communal green and parking upkeep) but apparently their solicitor didn't picked up there was a mistake and the wording for the service charge for communal and visitor parking spaces wording was missing and they actually want it as management company!

Didn't your own solicitor pick up on this mistake either?

As above though, the developer should be paying for your (new) legal costs.

shazk85

ciderboy2009 said:

Did you use a "real" solicitor company or a conveyancing company?

If the former then I would assume that they're not giving you any advice because you're not paying for it.  Have you tried asking them how much they would charge to advise you/ inform you of all of the legal ramifications?

If the latter then it's probably something they've never come across before - try contacting a "real" solicitor company.

As far as I am aware I used a "real" solicitor is a larger firm that cover all areas family law, conveyancing, criminal etc 
And the developers are paying for any costs involved in this matter so they will be paid no matter what

shazk85

eddddy said:

As above, you'd probably have to pay a solicitor for advice on this.

You could try saying to the developer something like -

I need to take advice from a solicitor before agreeing to this, please confirm that you will cover the costs. Obviously the solicitor's advise might be to sign or not to sign.


Essentially, you would sign if it is beneficial to you, or not sign if it's detrimental to you.

shazk85 said:

when I brought and signed contract was £100 year service charge for communal green and parking upkeep
...

 I would never of brough a house with management company as had flat with one previously as was a nightmare?

If you've agreed to pay a service charge to a company to manage the communal green and parking - essentially you've agreed to pay a management company.

How else did you expect the upkeep of communal green and parking would be carried out?

What is it that you don't like about the new set-up that's being proposed?



(BTW, £100 might be the service charge for the first year or two on a new build estate, but that's very likely to increase over the years as more maintenance work becomes necessary.)

The developers are paying for any costs involved with this as it is their mistake so cost is covered as i checked that out before I agreed to my solicitor working on this back in June.

This is how it was worded from my solicitor "The service charge currently required to contribute to the costs of cleaning, maintaining and repairing etc. any private roads, private services and/or visitor parking spaces that you have a right to use. If you do not have a right to use any of these you should not be charged for them.  The developer wants to replace this current informal arrangement with a formal arrangement. Their proposal is to put in place a management company that would be responsible for cleaning, maintaining and repairing etc. the public open space, the visitor parking spaces and the lighting systems (the “Managed Areas”) on the development. In addition cleaning, maintaining and repairing etc. the Managed Areas, the deed of variation also places the liability for repairing and maintaining the footpaths in the development upon the homeowners"

The things I don't like about management company are as my solicitor also pointed out
1 - Running a management company incurs costs such as accountancy fees, even if the management company doesn’t have anything to actively do. This means that it is probable that you will need to pay an annual service charge, even if it is just to cover the costs of running the management company.
2 - A service charge (i.e. the payments  required to pay to the management company) is still an unknown liability because the service charge costs can fluctuate from year to year depending upon what cleaning, repair and maintenance etc. is required in any given service charge period. In that sense, we would not consider the formal arrangement with a management company to give any more certainty over the costs than the current informal arrangement.
3 - If there is a management company in place, when sell property will require a management company sale pack to provide to the buyer’s solicitor. There is no standard fee for producing these packs, but in our experience the costs are usually somewhere between £200 and £500 plus VAT. This is an additional cost on a sale that you would have to pay. 
4 - Under the deed of variation you would become partly responsible for the costs of cleaning, repairing and maintaining etc. the public open space, the lighting system and the footpaths of the development. You are not currently required to contribute to these costs.
5 - Only the homeowners who agree to the deed of variation will be liable to pay for the cleaning, repairing and maintaining etc. of the Managed Areas and footpaths. This means that those homeowners who are part of the management company will effectively be paying the costs of those who are not.

shazk85

user1977 said:

shazk85 said:

The developer wanted to vary the provisions of the transfer deed I and others on the development entered into when purchasing the property (when I brought and signed contract was £100 year service charge for communal green and parking upkeep) but apparently their solicitor didn't picked up there was a mistake and the wording for the service charge for communal and visitor parking spaces wording was missing and they actually want it as management company!

Didn't your own solicitor pick up on this mistake either?

As above though, the developer should be paying for your (new) legal costs.

My Solicitor didn't pick up on the "mistake" as from the day 1 on my reservation form there was no way to know that there was any intention of having a management company but she did during the process and enquiry stage ask and advised from their solicitor "We note that there is an apportionment of rent and service charge within the contract. Is this property subject to rent and service charge? The developer’s solicitor has advised that it is not subject to rent but it is subject to a maintenance charge of £100.00 per annum." 
So the fact that their solicitor still didn't correctly inform us of the management company I don't think this was a thing, I hazard a guess that they are now struggling to sell the remaining houses and need funds and this is why they now want to do it so that they are not liable for the costs of running things ... but I could be wrong... mmm