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Remus2004, Barrister
Category: Property Law
Satisfied Customers: 71042
Experience:  Over 5 years in practice.
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Who bears the cost of a mutual deed of covenance with regards

Customer Question

Who bears the cost of a mutual deed of covenance with regards ***** ***** flying freehold?
Submitted: 3 years ago.
Category: Property Law
Expert:  Remus2004 replied 3 years ago.
Thank you for your question. My name is ***** ***** I will try to help with this.
-Could you explain your situation a little more?
Customer: replied 3 years ago.
The solicitor fort the buyer of my property has requested that my neighbour and I enter into a deed of covenance in respect of the flying freehold. My neighbour has asked for me to pay both his solicitor and my solicitors fees for this. I have refused on the basis that when he comes to sell his property he will need this deed too
Expert:  Remus2004 replied 3 years ago.

There is no guarantee that he would need this deed because obviously it wasn’t in place when he bought the property and you didn’t have one when you bought the property. It may be that the solicitor is being unnecessarily pedantic or it may be that he has discovered something which your solicitor didn’t and which your neighbours solicitor didn’t.

There is actually no need for this deed in most cases because this can be covered by indemnity insurance. Your solicitor should ask whether the buyer’s solicitor will accept indemnity insurance.

The situation with a flying freehold is that the flying part needs the support of the peace that is underneath and the peace that is underneath needs the cover from the part above. That is why it is a mutual covenant.

At this stage in time it is you that wants it and therefore whilst he does indeed get the benefit of it, you cannot compel him to pay 50% of it. He may not actually need it when he comes to sell. If he was selling now, and his buyer also requested this, then the situation would be different and you could then hold out for your 50%. In the future however his buyer may not raise the same concerns.

Presuming that you don’t want to lose the buyer arguing over this, you really have no option but to bite the bullet and to pay the extra cost if the buyer solicitor will not accept indemnity insurance.

I’m sorry that this is an unfavourable answer for you.

Can I clarify anything for you?