What is a Deed of Variation, and How Does it Work?
Deed of variation is one of those legal terms that sounds more complicated than it needs to be. Put simply, it refers to an agreement that changes part of an existing legal arrangement without starting again from scratch.
You might hear the term used in several contexts, including property, leases and inheritance. But what does a deed of variation mean when you’re buying or selling a property?
In this guide, we’ll explain what deeds of variation are, why you might need one and what they could mean for your property sale.
What does a deed of variation mean in property?
In property, a deed of variation is used to formally change something in an existing legal document affecting the property, rather than replacing the entire arrangement. It might be used to change a right of access, amend a restrictive covenant, correct an error or alter another existing right or obligation.
For many homeowners, this will relate to a freehold property. If you own the freehold, you own the property and the land it stands on rather than owning it for a set period under a lease. However, that doesn’t mean there can’t be existing legal rights or restrictions affecting your property.
These may have been created when the property or surrounding land was sold or divided in the past, and some can continue to apply even when the property changes hands.
And now, for those not clued up on property law, how about in simple terms?
Imagine you’re buying a house with a shared driveway that you need to use to access your home. During conveyancing, your solicitor discovers that the legal documents don’t properly reflect your right to use it. If the relevant parties agree, a deed of variation could be used to amend the existing documents to properly reflect that right, while leaving the rest intact.
Rights like this are known as easements. A deed of variation can also be used to amend other provisions affecting a freehold property, such as restrictive covenants – rules that restrict how a property or piece of land can be used.
What is a deed of variation on a leasehold property?
A deed of variation works in much the same way on a leasehold property, but there’s an important difference: you have a lease.
Rather than owning the property and land outright, a leaseholder owns the right to use the property for a set period. The lease is the legal agreement that sets out the terms of this arrangement, including the rights and responsibilities of the leaseholder and freeholder.
A deed of variation can be used to formally change a term in that existing lease.
For example, imagine you’re buying a leasehold flat. During conveyancing, your solicitor spots an issue with how responsibility for certain repairs is set out in the lease. If the relevant parties agree that the terms need changing, a deed of variation could be used to formally amend them.
Depending on the circumstances, a deed of variation could be used to change provisions relating to repairs, rights of access, use of the property or other rights and responsibilities set out in the lease.
So, in simple terms, the principle is the same with freehold and leasehold. With a freehold property, you’re generally changing an existing right, restriction or obligation affecting the property. With a leasehold property, you’re generally changing a term contained in the lease.
Why might you need a deed of variation?
There are several reasons why an existing property deed or lease might need to be changed. Sometimes an error is discovered in the legal documents. In other cases, an existing term may cause problems when you come to buy, sell or make changes to the property.
You might need to consider a deed of variation if:
- there is an error or ambiguity in an existing deed or lease
- an existing right of access isn’t properly reflected in the legal documents
- a restrictive covenant needs to be amended
- the terms of a lease need changing
- an issue is discovered during conveyancing that needs to be resolved before the sale can progress.
Whether a deed of variation is appropriate, and who needs to agree to it, will depend on exactly what you want to change.
What is a deed of variation when buying a house?
You might first hear about a deed of variation after you’ve found the property you want to buy and the conveyancing process is underway.
As part of their legal checks, your conveyancer will review the property’s title and other relevant documents. If they identify a term, restriction or right that could cause a problem, they may recommend that it is addressed before you proceed with the purchase.
A deed of variation may be one way of doing this. However, it isn’t simply a case of the buyer asking for the paperwork to be changed. The people or organisations whose legal rights are affected by the change may need to agree, and your mortgage lender may also need to be involved in some circumstances.
What is a deed of variation when selling a house?
A deed of variation can also crop up when you’re selling a property – and you might not even know there’s an issue until the buyer’s conveyancer spots it.
For example, they might identify an unclear access right, a problematic restriction or an issue with the terms of a lease. If the issue needs to be resolved for the sale to go ahead, your conveyancer may explore whether a deed of variation is appropriate.
This can add another step to the conveyancing process, particularly if another property owner, freeholder or lender needs to agree to the proposed change.
Can a deed of variation delay a house sale?
Potentially, yes. If a deed of variation is needed during a property sale, the relevant parties will usually need to establish what needs changing, agree on the new terms and complete the necessary legal paperwork.
How long this takes will depend on the circumstances. A straightforward correction that everyone agrees on may be very different from a change that needs to be negotiated with a freeholder, neighbouring landowner or mortgage lender.
A deed of variation doesn’t automatically mean a property can’t be sold, but it can introduce an additional step that needs to be dealt with during conveyancing.
How do you get a deed of variation on a property?
There’s no single process that applies to every deed of variation because it depends on what needs changing and who has an interest in it.
Generally, the first step is to establish exactly what the issue is and which legal document needs to be amended. Your conveyancer or solicitor can then determine who needs to agree to the change and how it should be documented.
Once the new terms have been agreed, the deed can be prepared and signed by the relevant parties. The change may also need to be recorded with HM Land Registry, depending on what has been varied.
Because a deed of variation can change legal rights relating to a property, it’s sensible to get professional legal advice rather than trying to amend property documents yourself.
How much does a deed of variation cost?
There isn’t one fixed price for a deed of variation. The cost will depend on factors such as what needs changing, how complex the issue is, how many parties are involved and whether negotiations are needed.
You may need to pay legal fees, and there can also be other costs associated with obtaining consent or registering changes where required.
If a deed of variation is needed as part of a property sale, your conveyancer should be able to explain the expected costs once they understand what needs to be changed.
How long does a deed of variation take?
Again, there’s no standard timeframe for a deed of variation.
If the change is relatively simple and all relevant parties agree, the process may be more straightforward. If terms need to be negotiated or consent is required from a freeholder, lender, neighbouring property owner or another party, it can take longer.
If you’re already in the process of buying or selling, ask your conveyancer whether the variation is likely to affect your expected completion date.
Do you need a solicitor for a deed of variation?
Because property deeds and leases establish legal rights and responsibilities, it’s sensible to get legal advice if you think something needs to be changed.
A solicitor or conveyancer can establish whether a deed of variation is actually needed, identify who needs to agree to it and make sure the change is documented and registered correctly where necessary.
If the issue has arisen while you’re buying or selling a property, speak to the conveyancer handling your transaction first.
Can you sell a house without a deed of variation?
Whether you can sell without a deed of variation depends on the specific issue.
Simply having a right, restriction or unusual term in your property documents doesn’t automatically mean you need a deed of variation before you can sell. The question is whether there’s a problem that needs to be resolved for your particular transaction to proceed.
A buyer or their mortgage lender may want an issue to be addressed before they’re willing to continue with the sale. In other circumstances, the existing arrangement may not prevent a sale at all.
Your conveyancer can advise you on whether a deed of variation is necessary and what your options are.
Need to sell your property?
Discovering an unexpected legal issue when you’re trying to sell can be frustrating, particularly if you’re already working to a tight timescale.
If you need to sell your property quickly, Good Move can talk you through your options. As a regulated property buyer, we buy a wide range of properties and can work with sellers in situations where a traditional sale may not be the right fit.
Get in touch with Good Move today for a quote, or find out more about how our house-buying service works.
