Frettens Banner Image


News and Events

Contacting your freeholder for a Deed of Variation

View profile for Hannah Faith
  • Posted
  • Author
Contacting your freeholder for a Deed of Variation

In my colleague Niki’s article, she explained why higher / increasing ground rents are an issue for leaseholders. 

We are speaking to a lot of leaseholders about their ground rent issues as they are finding it difficult to either sell or re-mortgage their flat with their existing ground rents. 

In most situations, we recommend that leaseholders approach their freeholder to see if they will willingly reduce their ground rent via a ‘deed of variation’.

Can I start a deed of variation without a solicitor?

Yes, you can approach your freeholder initially without a lawyer’s assistance to gauge their response.

Making this initial contact yourself will help to save money in the initial stages.

How to vary ground rent – your options

Initially you can approach your freeholder, as mentioned above, to see whether they would be willing to enter into a deed of variation to amend your current ground rent.

If they say ‘yes’ – great!

The freeholder would usually require you to cover the legal fees and pay a ‘price’ to compensate them for the ground rent that they will no longer receive.

Can a freeholder refuse a deed of variation?

Yes, the are not obliged to agree.

If your freeholder refuses to grant a deed of variation, or the terms they propose are unreasonable, then you can potentially use the ‘statutory lease extension’ route as your back-up plan.

Whilst you may not require a lease extension as such, a statutory lease extension would reduce your ground rent to a peppercorn (nothing at all). 

It’s somewhat of a sledgehammer to crack a nut; but it does what you need.

If you’re considering your lease extension options, please get in touch with us. We offer a free initial chat for all new clients where we can discuss your specific circumstances and help guide you.

Set out below is some useful information to help you contact your freeholder and to limit your legal fees as much as you can.

How do I contact my freeholder?

Have a look at your most recent ground rent or service charge demand you have received, as this should provide you with contact details for the freeholder and/or their managing agents. 

If a managing agent manages your building, then it might be sensible to contact them in the first instance.

Deed of Variation: What should I be cautious of?

If your freeholder is willing to grant a deed of variation, they will likely require you to pay their fees up front in respect of calculating their ‘quote’ or obtaining valuation advice in order to calculate the appropriate ‘price’. This is quite usual and reasonable.

However, it is important that, before you pay any money to your freeholder, you find out what amendments they are willing to make to your ground rent.

You don’t want to pay anything to them, only to find out that they will only vary your ground rent to something that still isn’t suitable.

How to write a deed of variation enquiry letter

We have created a template letter that you can send to your freeholder to enquire about a deed of variation. Click this link to download the document.

Once downloaded, you just need to insert the relevant details and email/post it to your freeholder or their managing agents.

What do I need to look out for in a freeholder’s deed of variation offer?

Firstly, check that the terms proposed solve the issue you are trying to fix. You may need to refer to your lender (or your buyer) to confirm they are happy to accept the proposed terms.

Ideally the freeholder will offer to reduce the ground rent to a peppercorn (nothing at all).

However, if the freeholder is not willing to do this, you should look for the ground rent to be capped at £250 for the entire lease term (or £1,000 if your property is in central London). 

Our article about increasing ground rents explains why capping the ground rent at £250 is so important.

Time limits for variation

Be aware that some freeholders may put a time limit on their offer i.e. it must be accepted and/or completed within a specific timeframe where-after, the price would usually increase.

Make sure you adhere to any timescale, otherwise your freeholder may insist that you pay for another valuation to be carried out so that they can issue a new offer.

What do I do next?

If you are happy with the terms and price proposed by your freeholder, you are best advised to instruct a specialist lawyer straight away to deal with the legalities of the transaction within the given timeframe. We would be delighted to assist in this respect.

However, if you are in any way unsure as to the price they have quoted, you may wish to seek your own, independent valuation advice, which we can arrange for you.

This would establish whether or not the freeholder is quoting a fair price for your deed of variation.

It might be that the statutory lease extension route would be more beneficial than the terms and premium being offered to you informally, so it is always best to check.

Deed of Variation Solicitors

Our specialist Leasehold Property Team is one of the largest in the region and are happy to discuss any of the issues outlined in this article.

If you have any questions, please call 01202 499255 and we can discuss your specific circumstances.

We also offer all new clients a free initial chat with one of our bright, knowledgeable lawyers.

The content of this article, blog or video is not intended as specific legal advice. For tailored assistance, please contact a member of our team.