It’s crucial that you understand what you can and can’t do on your property.
After all, if you’re renting, the landlord sets many of the rules.
And if you’re a leaseholder, you must answer to the freeholder.
Read on to find out where deeds of variation come into this.
What is a deed of variation?
A deed of variation is a legal document used in property when the terms of a pre-existing leasehold agreement are changed.
Both a leaseholder and a freeholder will sign it.
It should include details on:
- Allowing tenants to keep pets
- Making changes to the building
- Extending the lease term
- Letting tenants sublet the home
- Using the property for business
- Removing or adding a restrictive covenant.
Deeds of variation outside of property
Outside the property world, a deed of variation may be used in different contexts.
For example, it can sometimes be used to alter the contents of a Will.
Can a deed of variation ever expire?
No, not really. A deed of variation to a lease agreement becomes binding for the current people involved and any future owners.
People will need to be made aware of this when getting involved – i.e., taking on the role of either leaseholder or freeholder.
If you want to get it changed, you’ll need to get a new deed of variation completed.
How to create a deed of variation
You should contact a solicitor to help you create a deed of variation.
After all, it’s a relatively complicated document that requires professional support to create.
The document should clearly outline the changes being made.
It’ll then need to be signed by all parties involved. It gets registered with the Land Registry in most cases.
How do I know if a deed of variation applies to a property?
The person selling you a house should make you aware of this. Ask them if you’re unsure.
They aren’t allowed to deceive you – you could take legal action if they do.
You must take your time looking at the deed of variation. It could have significant implications for you.
You’ll need to find out if it can ever expire and ensure that it’s legally binding.
Deed of variation and property value
A deed of variation can impact the value of a property.
For example, if it dictates that ground rent is less than it might otherwise be, this could make the house more attractive to buyers.
But if it states that you can’t keep pets in the house, it could decrease its value.
Can I remove a deed of variation?
No, once a deed of variation gets signed, it becomes legally binding.
And you can usually only apply a deed of variation to an asset once.
You may be able to question the validity of a deed of variation at a tribunal. This could be because someone was coerced into signing it against their will, for example.
Does a deed of variation cost money?
Yes, if you want to pay a solicitor to create a deed of variation, it will cost money.
Each professional has their prices for this. Some charge by hourly rate, while others have a flat rate.
It almost always costs several hundred pounds. And in some situations, it can go up to £1,000 or higher.
Alternatives to a deed of variation
You have a few options that are different to a deed of variation. Each one is worth considering and speaking to an expert about.
Surrender and regrant
You can terminate the previous agreement and then create a new one. This is sometimes referred to as a surrender and regrant.
Additional agreement
You can also create an additional agreement, which adds new terms to an existing agreement.
Renegotiate
You can renegotiate terms and put this in writing, with the support of a solicitor.
Side letter
For commercial property, a landlord can create something known as a side letter.
This is a form of concession to a tenant. This change only applies to the current tenant, not future ones.
