Selling problem due to ground rent

eddddy

Flooxx said:

The latest email is: 

Hi, so we now need to wait for Homeground (the Landlord) about whether they will agree a deed of variation with the wording required by the buyers lender.    I sent the email urgently this morning so I hope we hear back next week


So I’m guessing the lender wants a different variation? I have asked my solicitor countless times for brief explanations of things but it’s really been quite difficult. 

You initially said that

• The lender wanted a deed of variation to cap the ground rent at £250

• Homeground proposed a different type of deed of variation, which the lender refused

Are you now saying that the lender is willing to accept some other kind of deed of variation?

Flooxx

eddddy said:

Flooxx said:

The latest email is: 

Hi, so we now need to wait for Homeground (the Landlord) about whether they will agree a deed of variation with the wording required by the buyers lender.    I sent the email urgently this morning so I hope we hear back next week


So I’m guessing the lender wants a different variation? I have asked my solicitor countless times for brief explanations of things but it’s really been quite difficult. 

You initially said that

• The lender wanted a deed of variation to cap the ground rent at £250

• Homeground proposed a different type of deed of variation, which the lender refused

Are you now saying that the lender is willing to accept some other kind of deed of variation?

At this point I honestly have no idea. My solicitor told me they wouldn’t accept it and then I received the above. So I’m totally and utterly lost. I’m going to try and call her tomorrow and gain some clarity - although that hasn’t been easy so far 

Joeowens

We have had the same issues selling our flat in Cardiff.  we currently have Ground Rent of £500 , which increased from £250 in 2022.  The lease states the rent review is every 25 years.  Twice the sale of the flat has fallen through as the Management Company are refusing a Deed of Variation and both our buyers were cash buyers.  It is so frustrating, as we are now in a position where we have to rent our flat as it has almost become unsellable.  Solicitors are obviously advising clients not to purchase on these basis.

ReadySteadyPop

anselld said:

Yes it is a common problem with certain lenders.  The buyers have selected an inappropriate lender under the circumstances.
So the options are …
   The buyers re-apply to a lender who doesn’t mind rent above £250.
   The existing mortgage co accepts the variation to the lease.  ( many do accept what is proposed)   It will cost you in time and fees.
   You find another buyer and warn them upfront about the rent so they can choose a suitable mortgage co.
    

It is not really practical to extend the lease at this stage.  It will be costly and time consuming and it would in any case require the price to be renegotiated as the flat would offer better value with a peppercorn rent and a longer lease.
   

 Drop the price to make the sale more appealing to potential buyers.