Those who own their home, or other land, will likely have found that property ownership is full of legal terminology. One such phrase you may come across is 'deed of variation'. You may have been told that you need a deed of variation in line with changes being made to your property, so today we are taking a closer look at what it actually is, why you might find yourself needing one, and what this means for the documents involved.
It's important to remember that you should always consult your solicitor for legal advice in these situations, as the details of your own deed of variation will be specific to you. However, this is a situation our customers regularly encounter, so this article is designed to give an overview of what the relevant terms mean and how they are generally applied.
What is a deed of variation and how does it apply to property?
Deed of variation is a term that applies to more than just property law; you may see it used in the context of wills and probate, for example. The phrase itself simply means that the terms of an existing agreement are being changed, whatever that agreement is related to. Changes to an original deed can only be made by another deed, so a deed of variation is a way of changing part of a contract rather than the whole thing.
In the context of property, a deed of variation is a legal document that allows changes to be made to the terms of a lease (in the case of a leasehold property) or the property deeds (in the case of a freehold property). It will often be used where there has been a change in circumstance, to document alterations to the specifics of the property in question, or to rectify any mistakes that were made in previous property documentation.
How does a deed of variation apply to leasehold properties?
On a leasehold property, a deed of variation supplements an existing lease agreement, amending a term, or terms, stated on the existing lease with new ones - without the need to terminate the existing agreement.
Property leases tend to be set to a lengthy time period - often 99 years, but they can be up to 999 years! - when first drawn, so it is not at all unusual for the terms to need to be amended in that time. These can be things like:
The terms of a lease are changing to reflect changes in the law, and thus the agreement between freeholder and leaseholder requires altering
Restrictive covenants are being removed from the terms of the agreement
The shared space associated with several flats (such as a garden) within one property is going to be divided differently between them and this change needs to be documented
An area of a building (such as a loft) has remained freehold while other parts of it are leasehold, and this area is now being purchased by one of the leaseholders
All parties wish to introduce a specific provision, and this provision has not been mentioned in the original lease agreement
There were errors in the original lease agreement, and these are being rectified to ensure that they accurately reflect the original intentions
However, there are many scenarios in which a deed of variation may be appropriate. There are also some situations where a deed of variation may not be the best option, which is why discussing the matter with your solicitor is so important.
Getting a deed of variation for your leasehold property
For the terms of a lease to be varied, both (or all) parties involved must agree to the new terms. Occasionally there might also be an additional party involved, such as a mortgage lender. Either party can initiate the process, although usually neither can force the variation without the other's consent.
While it is not strictly speaking a legal requirement to instruct a solicitor for a deed of variation in these circumstances, it is the best course of action to get specialist advice. What might appear to be simple can sometimes be surprisingly complex, and the document will need to be correct to be submitted.
The time it takes to get a deed of variation can vary depending on how long it takes those involved to agree on the terms and submit the relevant documents, but it would be usual for it to be a matter of weeks if the case is not complex.
A deed of variation for a leasehold property can cost hundreds of pounds, although it does depend on how long it takes and the number of parties involved (for example in the case of multiple flats), so it is possible for it to reach the thousands in complicated cases with many groups or individuals involved.
If the element of your lease agreement that you are altering is related to the specific area of the premises that the agreement applies to, then you will need to factor getting a new plan into the deed of variation process.
What plan do you need to support a deed of variation?
If you aren't part of the legal industry and you are told you need a new plan for your deed of variation, it can be a challenge to understand the ins and outs of what is required.
When the lease variation pertains to the space, or use of the space, in a leasehold property, it is a new lease plan that you will need to complete your deed of variation documentation. This lease plan does not fundamentally differ from the one you would get if you were registering a leasehold property for the first time, it simply reflects the new agreement rather than the previous one.
It is important that your new plan reflects the entirety of the new agreement, not just the section which is going to be changed. For example, if you were to convert the loft of a property and needed a new lease plan, it would need to show the whole property including the loft, rather than just the loft itself. The overall lease plan still needs to be compliant, rather than an 'add-on' to your existing compliant plan.
This also has the benefit of making sure you have everything in order for the future; many properties have outdated lease plans, and these outdated elements would not often not be identified if changes were not already being made.
The cost of a lease plan for a deed of variation is likely to be around the same as one that is for any other purpose - usually beginning in the region of £200-£300 depending on your property type. Similarly, how long it takes to get a lease plan for a deed of variation is usually the same timeframe quoted by your supplier for lease plans in general. At Lease Planners, the process usually takes around one week.
Does a deed variation need to be registered with the Land Registry?
It is common practice that a deed of variation is registered with the Land Registry. This ensures that changes to the lease and the area included within it, which the deed of variation will detail, are recorded and accessible to those who need them. For example, someone reviewing the leasehold title should do so in conjunction with the lease, so it would be important for them to also access the deed of variation that applies to that lease.
It is worth being aware that there are Land Registry fees for registering a deed of variation.
Get a Land Registry compliant lease plan for your deed of variation
At Lease Planners, we often work with customers on new lease plans to support in preparing a deed of variation. We guarantee complete accuracy and compliance with Land Registry guidance in all lease plans we supply, and aim to work to a clear, straightforward process for every customer.
If you would like to discuss a lease plan for your property or have any questions, contact us today.
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