Selling Flat - Estate Company refusing DoV

Jack268

Hi All,

I'm selling my flat and so is another property in the complex, they sold prior to me however they've been having issues for the last 9 months where mortgage lenders require a DoV because the estate charge has hit the threshold of £250 and therefore close to the AST Trap and without this DoV to pinecorn the charge the mortgage lenders are refusing to go ahead.

The estate company has said no to the DoV and now our estate agents have informed us of the situation with the sale and have advised us that we're going to have the exact same issues and therefore making the whole complex unsellable at all.

I have contacted my local MP as well to see if the weight of their name can help push anything.

Has anyone come across this situation at all or know of any workarounds to get us completed otherwise it sounds like we're literally stuck?

Many thanks!

user1977

The "AST trap" has been abolished by the Renters Rights Bill (see thread here - Royal Assent has since taken place on 27 October) - are none of the solicitors paying attention?

(technically it won't be abolished until 27 December but even if your sale completes now, there's hardly likely to be forfeiture of your lease before then)

eddddy

Jack268 said:

...mortgage lenders require a DoV because the estate charge has hit the threshold of £250 and therefore close to the AST Trap and without this DoV to pinecorn the charge the mortgage lenders are refusing to go ahead.

Do you mean that you requested (via your solicitors) that  the management company / freeholder cap the Ground Rent at £250 - using a DoV?

It sounds like you have an escalating (or increasing) ground rent. How does it escalate / increase?

Presumably, you realise that you'd have to pay a chunk of money as compensation for having the ground rent capped. What exactly was the management company's / freeholder's response to the request?



Things to consider...

• 1) Most mortgage lenders say they will accept ground rents over £250, if the buyer takes out indemnity insurance. Do you know if this option was offered to your buyer? (There are still risks to this approach for the buyer, but it should satisfy most mortgage lenders.)

• 2) You can do a statutory lease extension to reduce the ground rent to zero. But this might take 6 to 18 months. And you will have to pay compensation to the freeholder for loss of ground rent (plus other costs)

• 3) The Renter's Rights Act 2025 solves this problem (without the need for a DoV, indemnity insurance or a statutory lease extension). The Act received Royal Assent on 27 Oct 2025 - but it hasn't come into force yet. But I guess it will within the next few months.

But if the problem is the escalating ground rent (rather than the £250 threshold), indemnity insurance and/or the Renters Rights Act won't solve that.

In that case, you could do a Statutory Lease extension - but the compensation you have to pay could be high.

user1977

eddddy said:

Jack268 said:

...mortgage lenders require a DoV because the estate charge has hit the threshold of £250 and therefore close to the AST Trap and without this DoV to pinecorn the charge the mortgage lenders are refusing to go ahead.

• The Act received Royal Assent on 27 Oct 2025 - but it hasn't come into force yet. But I guess it will within the next few months.

It's one of the provisions which come into effect two months after assent.