Defective lease on leasehold purchase

hazeyj

Hiya Has anyone got any experience of how to get round problems when faced with a defective lease?

My sols told the vendors sols 4 months ago that it was not clear in the lease whose responsability it was to insure the building. They asked for a deed of variation to rectify this. The freeholders on the building are not willing to agree to this deed of variation as they say that my sols are being picky and that no other flats that have been sold in the building have needed this so it is not necessary. The sellers sols agree with this. My sols did try to get mortgage indemnity but the clauses were that I had to ensure that myself and the surrounding flats have to obtain full building insurance even though this is already paid to the management company through the sevice charge. They also say that unless I receive the deed of variation that will advise my mortgage co not to release the funds. Can anone advise please.

RiskAdverse100

There are usually only two ways of dealing with a lease defect.

Either the lease is varied by a deed of variation signed by the freeholders and the flatowner or an indemnity insurance policy is taken out.

Insurance is often a much easier and cheaper solution. The most common lease problems are unlikely to ever result in a major problem and so cover can be obtained at little expense and very quickly.

Deeds of variation should be avoided if possible. The freeholders will know that they are only ever needed because a flat is being sold and will try and charge extortionate sums before they will agree to sign them.

It is unclear what your exact problem is although I accept that if may involve reading the whole lease to understand it fully.

However, if indemnity insurance will not sort it out then it is really up to the Seller to get a deed of variation signed. If your solicitor says that he will not be able to give a clear report on the property to your lenders with the lease as it is then you either buy with cash and no mortgage or you cannot go ahead.

It is a buyer's market at the moment and this should mean that, in many cases, sellers have to bend over backwards to comply with the wishes of buyers to get a sale. Your solicitor must (after getting you first to agree this course of action) make it clear both to the agents and the Seller's solicitors that unless the problem is sorted out by a deed of variation then you are withdrawing.

Of course the Seller's solicitors will say there is no problem. In most cases even if they have told their client that there is a problem they will be instructed to say there isn't! There is also a good chance that they acted in the purchase and to agree that the lease contains a defect will be an admission that they didn't investigate the lease properly when their client was buying.

RiskAdverse100

hazeyj

Thanks for the advice. Any more advice most welcome.

hazeyj

Just to keep you informed. I sacked my sols yesterday after three months of getting nowhere and my new sols are enabling me to exchange on Friday. They have done 12 purchases at the same block in which I am buying and are very familiar with teh lease and perceive the lease defect to be satifactory explained in the sub lease. I have been advised to report my old sols to the Law Society after they advised me to take out extra building insurance re the defective lease which apparently automatically invalidates the block party building insurance. Apparenly the sol I have been dealing with is renownded in Leeds for his incompetance. I have wasted three and a half months and with my new sols I complete next week. Daft.