• Leasehold Plan Issue

    By Guest on 04th Jan 2024

    Hi, I’m buying a flat and my solicitor has highlighted that there is no internal layout plan in the lease showing the flats and shared internal areas which they think there should be and in the definitions it refers to “shared internal areas shown on a plan “and the legend on the lease plan refers to the wrong plot no even though the correct flat building is edged red. I am also allocated a parking space in the lease but that space is not referred to on the plan as the wrong plot legend has been used but it is referred to in the lease wording. Do we need a deed of variation or would an indemnity policy cover these issues . I am unsure and my solicitor thinks the lease is badly drafted and would like a deed of variation with new plans . Thanks

  • 1 Answers

    By Guest on 05/01/2024

    Indemnity policies are intended to be used for one of two reasons - either as a last resort where correction of the issue is not possible (or not feasible), or to cover off a purely theoretical problem, usually to satisfy a mortgage lender or an overly cautious buyer. All too often they are used inappropriately by lazy or inexperienced conveyancers to avoid doing what actually needs to be done. In your case, assuming the landlord is around and and is willing to cooperate, it should be fairly simple to vary the lease and correct the problem once and for all. A seller will often push for an indemnity policy because for him that would be cheaper and quicker, and once he has sold the problem is passed on to you.

    In reality, the risk here may not be one that insurance will help with, because there is nothing in what you describe which is likely to lead directly to financial loss. The real problem is that future buyers, and mortgage lenders, are likely to look at the title in the same way as your conveyancer is now, so that you may struggle to sell or mortgage the property in future without either spending money correcting the defect or reducing the price. neither of these "losses" would be insured.

    As a general commentary, I'd add that in a typical conveyancing transaction, the only party you deal with who has your interests and yours alone at the forefront of his thinking is your own conveyancer, so it makes sense to follow his advice.

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