Lease variation

Experienced, professional landlords know the provisions they need to have in the leases for their properties to make them the profitable investments they intended. Many other landlords and leaseholders might not be quite so certain that their leases are ‘fit for purpose’. At this point either party would be well advised to seek out the services of an experienced solicitor who specialises in leasehold property to ensure that their best interests are identified and are being best served.

Does the lease really need variation?

Many such specialist solicitors will offer a service that includes a free initial appraisal of the existing lease. This lease ‘MOT’ could identify several good reasons to apply for a lease variation such as:

• Dysfunctional, inadequate or absent provisions, which might include those covering:

  •  Periodic increases in ground rent and the recovering of any arrears that accrue.
  •  Repair and maintenance required for a reasonable standard of accommodation.
  •  Provision of services required for a reasonable standard of accommodation.
  •  Recovery of money from either party expended on building maintenance by one of them.
  •  Computation of the service charge.

• Out of date provisions that don’t relate to the current state of the property

• Provisions that are not compatible with modern day legal best practice.

Deed of variation for lease extension – the statutory right

The leaseholder might also want to extend the lease on their property by 90 years. This right to lease extension is  a statutory right and is the one type of lease variation application which cannot be denied – although much negotiation between the parties might ensue before it is completed.

Once the extent of lease variation has been mutually agreed by the freeholder and the leaseholder it is straight forward process to finalise the procedure. The freeholder’s solicitors will obtain a copy of the original lease, the full written details of the variations to be made and the name and address of the leaseholder’s solicitors. If it was the leaseholder who instigated the lease variation procedure then it is usual for them to pay the legal fees incurred for completing the lease extension.

Lease variation – Do I really need a solicitor?

Whilst there is currently no legal requirement to have a solicitor undertake a lease variation the potential complexity of the issues involved coupled with the overriding need to ensure that the involved party’s best interests are not compromised, makes appointing a specialist solicitor strongly advisable.

Failure to obtain mutual agreement to a lease variation

Of course where mutual agreement to the variation cannot, even after mediation, be obtained and application has to be made to The Leasehold Valuation Tribunal (LVT) under Part4, Section 35 of The Landlord and Tenant Act 1987, a lease variation solicitor’s involvement becomes almost essential.

It is the trained lawyer who will have the expertise to assess how the LVT is likely to view the application, what the likelihood is of them ordering compensation is and who will have to pay that compensation. Foremost however, they must determine whether or not the circumstances for making a lease variation application to the LVT have been met. These circumstances are specific, covering:

1) Inadequate provision for:

  •  repairs and maintenance
  •  provision of services
  •  computation of service charges
  •  recovery of monies spent for the tenants benefit.

2) A variation requiring two or more leases to be identically varied to be effective.

3) A counter application to vary the leases on other flats owned by the same freeholder in a block on any of the grounds included in ‘1’ above.

4) The failure of a lease to make satisfactory provision in relation to insurance for dwellings other than flats.

If a groups of leaseholders make a joint application they must be able to show that all the leases involved have to be altered for the variation to be effective.

Getting a decision to vary agreed between leaseholders

When there are eight leases involved, the decision to vary the lease must be agreed by at least seven of the leaseholders; when there are less than eight leases the decision to vary must be agreed by at least 75% of the leaseholders and not opposed by more than 10%. The freeholder/landlord can count as one of the parties concerned.

Deed of Variation – the effect

Upon an agreed variation being made a ‘Deed of Variation of a Lease’ will be issued and the conditions of the old lease will cease to have effect. However, a lot can go wrong between wondering if your existing lease is up to scratch and having the correct changes made. The roof over your head as a leaseholder or an income from leased properties as a landlord or freeholder are things you don’t want to put at risk by getting this process wrong and taking good legal advice at the right time will usually save a great deal of heartache later on.

Need specialist advice on lease variation? Call us now

Whether you’re a tenant, landlord or freeholder, we can help you with lease variation.

Our team regularly take clients instructions taking instructions with regard to property matters by e-mail, phone and Skype video – so it doesn’t matter where you live – even if you’re based overseas- provided the property is in England and Wales.

  • Call us today on FREEPHONE 0800 1404544 or email us using our contact form for FREE initial advice and a FREE quote.
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