When is a Deed of Covenant Required in Leasehold Purchases?

Are you thinking of buying a flat or maisonette somewhere in England or Wales? If so, there’s a good chance you’ll come across something known as a deed of covenant during the process - a document with a surprisingly big influence on how things work once you’ve moved in.

A deed of covenant is a legally binding promise you sign during many leasehold purchases, confirming the terms, conditions, and obligations between yourself and the freeholder.

Homebuyers often aren’t aware of it until their conveyancer raises it, as echoed by data published by The Leasehold Advisory Service. It shows a big proportion of enquiries relating to post-sale lease issues, which is another way of saying many UK buyers aren’t fully grasping what they’re signing for.

In this article, we give you a rundown of what the deed is for, when it’s needed and what your solicitor will be checking in the background.

What is a deed of covenant?

A deed of covenant is a document that spells out what a new leaseholder signs up to once a flat or maisonette is transferred into their name. It works alongside the lease and gives the freeholder or managing agent a clear record of who’s agreed to the building’s rules and shared responsibilities.

Although each building uses its own wording, a the deed will typically cover:

• That the new owner agrees to follow the rules set out in the lease
• What happens if payments are late or building rules are breached
• Who can enforce the terms, and how disputes are handled
• How communal areas, gardens or hallways should be used
• Payment of service charges, ground rent and other fees
• Who is responsible for repairs inside the flat and in shared areas
• Restrictions such as subletting, pets or alterations
• Obligations linked to building safety or access

Your conveyancer should go over the deed as soon as they receive the leasehold information pack, since it needs to be approved and signed prior to completion. Problems spotted early are usually easier to deal with.

When is a deed of covenant required?

When you buy a property with communal areas, like a flat, a deed of covenant is usually raised when the freeholder or managing agent wants written confirmation that you understand and accept the building’s rules.

The thing is, not every building asks for one. Requirements vary, and older leases often rely on different paperwork altogether. That’s why your conveyancer checks the management pack carefully to see whether this deed applies in your specific purchase.

You’ll normally need a deed of covenant when:

• The lease says one must be completed on every sale
• The freeholder or managing agent requires it before updating their records
• There are shared areas (gardens, hallways, parking) that all residents must follow the rules for
• Service-charge contributions or building rules need to be acknowledged by each new owner
• The development uses a residents’ management company that needs written consent from incoming owners
• The freeholder wants a clear route to enforce obligations if something goes wrong

You usually won’t need a deed of covenant when:

• The lease is old and uses a different mechanism (such as a licence to assign)
• The freeholder already relies on the lease alone and doesn’t ask for extra paperwork
• The building has no shared areas or shared services that need additional confirmation
• A management company has switched to modern compliance documents instead, like a certificate of compliance only
• The seller’s solicitor can show that previous transfers in the building didn’t require one

Your conveyancer checks this early because, when required, it must be approved and signed before you can complete. Conversely, failing to catch it early is one of the most common reasons leasehold purchases are delayed.

What does a deed of covenant cost?

Most buyers first hear about a deed of covenant when the managing agent or freeholder sends them a bill. Costs can vary a lot between buildings because each party is able to set its own administration charges. Your conveyancer will confirm the amount once the management pack arrives.

Fees range from £75 to £300, although some developments charge more if the deed has to be reviewed by their solicitor or if extra approvals are involved, and it’s something you’ll normally have to pay before you take possession of the property.

A few things to keep in mind:

• The charge is set by the freeholder or management company, not your conveyancer
• Fees must be “reasonable” under leasehold rules, but no fixed national rate exists
• Payment is required to complete if the lease makes the deed compulsory
• Your conveyancer can ask for clarification

This is usually a straightforward part of the process, but it’s worth knowing the fee can vary quite widely between buildings.

What happens if the deed of covenant is missed or delayed?

Things can drag if the solicitor doesn't notice the deed is required until later in the leasehold purchase. The freeholder or managing agent usually won’t update their records without it, and that can hold up completion. If the deed is delayed, you might see knock-on effects such as:

Completion being pushed back

Approval can’t be given until the deed is signed and the fee is paid; the selling agent can’t hand over keys.

Extra admin fees

Some freeholders charge extra for urgent or 'expedited' processing.

Pressure on the chain

Any delay in leasehold paperwork can create timing problems if others are completing on the same day.

Your conveyancer will usually chase the deed as soon as it appears in the management pack, and if the freeholder is slow to respond, they can ask for a fast turnaround to keep things moving.

How will a conveyancer help me to avoid deed of covenant delays?

Your conveyancer usually checks for the deed as soon as the management pack arrives, giving them enough time to deal with the freeholder or managing agent.

Behind the scenes, they’ll usually take care of the key steps:

• 1

  Checking the lease to see whether a deed of covenant is required

• 2

  Chasing the freeholder or managing agent if approval is taking too long

• 3

  Reviewing the management pack to confirm who needs to sign and what fee applies

• 4

  Making sure the wording matches the lease and doesn’t add anything unexpected

• 5

  Sending the document to the right people and tracking signatures

When you have a good conveyancer, you won’t need to worry. A solicitor who knows what they’re doing will ensure everything is handled promptly, allowing your purchase to proceed smoothly without any unnecessary delays or complications.

Getting the clarity you need before you commit

Our panel solicitor will make sure the deed is picked up in good time, confirm any fees and check the wording so it matches the lease you’re buying into. With an experienced conveyancer behind you, it shouldn’t cause any stress.

Do You Need an Online Conveyancing Quote?

• Fixed, competitive legal fees with no hidden costs.
• Expert conveyancing solicitors with proven local knowledge.
• No Sale, No Fee protection for your transaction. Terms apply.
• On 99% of mortgage lender panels.
• Fast completions.
• We can solve any property challenge.

Get a Conveyancing Quote

Trustpilot