Defective Lease · Report on Title scenario
It is a gap between an obligation and the means of performing it. Leases normally give a tenant the right to enter other parts of the building where that is needed to do what the lease requires of them. Where the right is missing, you can be obliged to carry out work you have no right of access to do — which is a real problem on the day it bites and an invisible one until then.
From the e-ROT archive
This scenario is drawn from Report on Title material dealing with this specific circumstance.
Flats share things. A pipe serving your flat runs through someone else's; a repair to your ceiling is work on their floor; access to a roof is through a stairwell you do not demise.
A right of entry is the lease's answer to all of that. Without it you are dependent on the goodwill of a neighbour and the cooperation of a landlord at exactly the moment — a leak, a failed roof — when goodwill is in shortest supply.
If a repair has been blocked by a gap in the lease, what was reported to you about the lease's provisions during the purchase is a reasonable place to start.
Find out what should have been explained → WhenIBought.com<b>A deed of variation</b> inserting the right. The real fix, and the one that holds for future owners. It needs the freeholder to agree, and freeholders often resist varying one lease in a block on the basis that all the leases should be on the same terms.
<b>An indemnity policy</b> covering financial loss or litigation arising from the absent right. It is the quicker and cheaper route and it does not put the right into the lease.
You can also decide the gap does not matter to you and proceed without either — which is a legitimate choice where the building is simple and the relationships are good, but it is a choice to make knowingly rather than by default.
<b>Asking the freeholder destroys the insurance option.</b> If you approach them about a variation, the policy is invalidated. The two routes are mutually exclusive and you have to pick before you act — the same rule as every other indemnity in conveyancing, and the Lexsure wording below states it explicitly.
<b>Alterations are commonly excluded.</b> These policies typically do not cover future alterations, so if you are buying with work in mind, say so before the policy is arranged. The terms may need to be varied, and that is much easier to do beforehand.
Also worth settling early: who pays for the policy. It is usually asked of the seller and not always agreed.
From the e-ROT archive
Report on Title paragraph
Ordinarily, you would expect a lease to include a right to enter the other parts of the building (if required) to carry out your obligations under the lease however this lease does not include such a provision.
We asked whether the Seller would approach the freeholder to enter into a deed of variation to incorporate such a provision. However, the Seller is not willing to do this and the Seller's Solicitors have suggested we deal with this defect by way of an indemnity insurance policy. …
Historic wording — DO NOT USE on a current transaction. Published in March 2019 and shown to illustrate how this defect has been reported. It is reproduced exactly. Lender attitudes to insurance as a solution to lease defects have moved since.
Do not rely on wording copied or saved from this page. Get the current wording dealing with this scenario.
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