Question 1

Deed of Covenant

Accepted Answer

Should the deed of covenant give details the owners including the bank and building society? If so should a copy of this covenant be sent to a bank or building society? I note that the Land Certificate states the association needs to be informed of any change of ownership. Does this also include any change of mortgage lender. Is there any need for the association to hold information about mortgage company if so why? The FPRA responds: A deed of covenant is a document which is entered into between the outgoing tenant and the incoming tenant and confirms that the incoming tenant will abide by the terms of the lease. It is not usual practice for such a document to be sent to a bank or building society. It is just usually held by the freeholder / landlord. The lease will confirm whether or not the landlord needs to be informed of a change of lender. A notice will usually have to be served on the landlord. This is important information for the landlord to have. The reason being that if one of the tenants is in arrears or in breach of lease terms for whatever reason, if the landlord has details of the tenant’s lender, the landlord can write easily to the lender putting them on notice of the breach and of any intend action to enforcement the terms of the lease.

Question 2

Deed of Covenant

Accepted Answer

Should the deed of covenant give details the owners including the bank and building society? If so should a copy of this covenant be sent to a bank or building society? I note that the Land Certificate states the association needs to be informed of any change of ownership. Does this also include any change of mortgage lender. Is there any need for the association to hold information about mortgage company if so why? The FPRA responds: A deed of covenant is a document which is entered into between the outgoing tenant and the incoming tenant and confirms that the incoming tenant will abide by the terms of the lease. It is not usual practice for such a document to be sent to a bank or building society. It is just usually held by the freeholder / landlord. The lease will confirm whether or not the landlord needs to be informed of a change of lender. A notice will usually have to be served on the landlord. This is important information for the landlord to have. The reason being that if one of the tenants is in arrears or in breach of lease terms for whatever reason, if the landlord has details of the tenant’s lender, the landlord can write easily to the lender putting them on notice of the breach and of any intend action to enforcement the terms of the lease.

Deed of Covenant

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