Deed of variation for a lease

Do you need a deed of variation for your flat?

The need to vary a lease, whether commercial or residential property, is quite common, especially with longer leases. The reasons can seem quite trivial and minor in some cases, but as leasehold interests get sold, and mortgage lenders are often involved, the formalities become important.

The most common time when a flat owner finds that they need to get a deed of variation is before selling or on remortgage. The most common reasons for needing to vary a lease  are :-

• The lease is approaching 80 years left and needs to be extended to comply with the likely buyer’s mortgage lenders requirements –  for more on this please see our lease extension page.

• Some clauses in the lease no longer comply with current mortgage lenders requirements. These do change over time. The most common areas creating problems with old leases are building Insurance clauses not being comprehensive enough or not noting a mortgage lenders interest and/or the lack of a  mutual enforceability clause

• There is a defect in the lease or the lease plan – in this situation, after sorting out the issue with a deed of variation, you may want to look at whether your solicitor, when you bought, was negligent in not spotting the error.

• The layout of the flat has been altered which means the lease plan needs to be varied.

What’s involved and how much does it cost?

This is the area which can be really frustrating. Commonly, as leaseholder, you will not only need to pay your own legal fees and other costs such as Land Registry fees, but also the freeholders legal fees and probably also your mortgage lenders legal fees. The deed of variation itself is fairly straightforward. You should budget for several thousand pounds of legal fees and costs.

With 2 or 3 parties involved and where the matter may not be their top priority, it can take several months to get a deed of variation agreed, signed off and registered at the Land Registry.

What about a commercial property lease? Is a deed of variation needed?

The reasons to vary a commercial lease do sometimes differ, the most common reason other than  defect or error in the lease is an agreed change of use or significant alterations to the premises. The difference can arise where the commercial lease was granted for a period of less than 7 years. In that case, the lease would not have needed to be registered at the Land Registry and so a formal deed of variation may not be necessary, making it potentially quicker and easier to agree more informally. With a  short lease, this also makes sense as there will not be mortgage lenders involved and a potential assignee or sub-tenant will also likely be more flexible than with a very long residential lease.

Solicitors for a deed of variation

With 1 of the UK’s largest and best rated property law teams, we provide a highly experienced, efficient and cost effective service for clients who need a deed of variation. Contact us for a chat or to get a fee quote.