What is a Deed of Variation?
Estimated reading time 6 minutes
If you have been a regular visitor to our blog, you’ll have noticed we often dive into the world of property jargon and terminology. Such is the varied number of terms and titles that it often becomes very easy to get a little confused. One particular term you may not have heard or paid much attention to is “Deed of Variation”.
A Deed of Variation can apply to property contracts, employment contracts and even wills. It is simply a change to a part of a contract and sees specific terms for one specific section of the contract altered whilst the rest of it remains the same. In property, these changes could be related to something you wish to do with the property or a mistake that you have spotted in the original deed.
How does a deed of variation apply to property?
In property, a Deed of Variation can be applied for a variety of reasons. Commonly sought by the leaseholder, it will see that specific terms of a pre-existing leasehold agreement are changed.
Common changes could include:
- Allowing pets
- The right to sublet
- Changing the use of the building (from residential to commercial)
- Alterations to the external or internal of the building
- The removal or addition of a restrictive covenant
What is a deed of variation for a freehold property?
When it comes to the freeholder changing the deed of variation, this often stems from different reasons from those that a leaseholder may be considering. A deed of variation sought by a freeholder may for things like:
- Correcting title deed errors
- Amending covenants related to the property
- Fixing incorrect boundary measurements
- Changing terms of the original property deed
- Changing the ownership
What is a deed of variation for leasehold property?
For leasehold properties, a deed of variation relates to making changes to an existing leasehold agreement without the need for a new lease. Examples include those we mentioned earlier such as allowing pets or having the right to sublet.
Who can suggest the deed of variation?
Either the leaseholder or freeholder can suggest a change to the lease and seek a deed of variation. However, this is not to say it will be agreed upon. This means that either party can reject the change if they do not agree with it. However, should the change be required due to a change in law, both parties must agree to it.
Changes to the lease via a deed of variation are not free though, as we will see further down the page.
Who pays for a deed of variation and how much does it cost?
The party wishing to instigate the change to the lease must cover the cost of the deed of variation. In most cases, this will be the leaseholder. In addition to the costs of the deed itself, the costs incurred by the freeholder for the change may also need to be covered by the leaseholder.
Costs for a deed of variation vary depending on what change is required. With each case judged on its individual merits, costs can range from approximately £500 to well over £1,000. However, it is also possible to find costs significantly lower than this too.
Will my deed of variation mean changes for other leaseholders too?
No. If you, as the leaseholder, successfully change your lease with a deed of variation, it will only apply to you, and not the other leaseholders within the same building. That being said, if a freeholder has granted the change, it may be something they are willing to consider for other residents too.
Will I need to notify the Land Registry about a deed of variation?
Yes, 100%. By varying the lease, you are changing a legal document and must officially record any changes made to it. If, for example, you plan to sell the property in the future, mortgage lenders, solicitors and more will need to know the exact terms of the current lease and not be misled by a lease that is no longer valid. Registering the deed of variation with the Land Registry is the best way to achieve this.
Can I remove a deed of variation?
No, once the change to the leasehold agreement has been made, it is set in stone. Should you have purchased the home and believe the deed should be invalidated, you can raise a concern via tribunal however there is no guarantee of the variation being removed or altered.
How long does it take to get a deed of variation?
Much depends on the complexity of the changes to the leasehold agreement. Solicitors will be involved, and there may even be some negotiating over the severity of the changes. This can see the process take some time. Once submitted, you can expect it to take a few weeks for it to become official.
What’s the process for getting a deed of variation?
Drafting a deed of variation is quite simple but before doing anything, both parties must agree to it being actioned. In this example, we’ll assume the leaseholder is seeking a deed of variation.
- Speak with the freeholder about your wish to change an aspect of the lease.
- If there is a mutual agreement to the changes, you can proceed with obtaining your deed. If there is not, you may need a tribunal.
- Speak to a solicitor. This is necessary should there be a mutual agreement or you wish to pursue a tribunal.
- Have the draft deed of variation created by the solicitor.
- The deed is signed by both parties in front of witnesses.
- Register the deed with the Land Registry.
If you live in a leasehold property but have found the freeholder unwilling to let you make changes to the lease, you might consider selling. Especially if the changes limit your enjoyment of living in the property. If that’s the case, why not speak to Bettermove? We can help you sell your flat fast, bypassing complicated red tape and complexities. In fact, we sell your house fast so you can get your property plans moving without fear of them being compromised. Our route to sale means your property can be sold in just seven days, and with no fees, you sell your house for free too. No hidden costs, no surprise charges, just a speedy sale exactly when you want it. Contact us today to get moving.
