Deed of Covenant When Selling a Leasehold Flat

If you are selling a leasehold flat, the conveyancing process has several moving parts your freeholder controls: the management pack, the licence to assign, the confirmation of service charge accounts, and — often — a deed of covenant. Of these, the deed of covenant is the one sellers are most often caught out by, because it does not feature in freehold sales and because the timing is controlled almost entirely by the freeholder.

This guide explains what a deed of covenant is, when it is required, who pays for it, how long it takes, and what to do if it threatens to delay your sale.

What is a deed of covenant?

A deed of covenant is a short legal document in which the new owner of a leasehold flat makes a direct promise to the freeholder (and sometimes a residents’ management company) that they will comply with the obligations set out in the lease. Those obligations typically include:

• Paying the ground rent on the due date.
• Paying the service charge and any reserve fund contributions.
• Keeping the interior of the flat in repair and allowing access for inspections.
• Complying with use restrictions (for example, no business use, no short-term lets).
• Observing any alterations restrictions and seeking consent before structural works.

The covenants themselves are already in the lease. The deed of covenant does not create new obligations — it simply binds the new owner to the existing ones in a way that the freeholder can enforce directly against them. Without it, the freeholder would have to enforce through the previous leaseholder or through the chain of title, which is more cumbersome.

When is a deed of covenant required?

Whether a deed of covenant is required depends on the wording of your lease. Two situations are common:

• The lease requires it. Many modern leases (broadly from the 1990s onwards) include a clause stating that each new owner must enter into a direct deed of covenant with the freeholder before the transfer is registered. In these cases, the deed is mandatory.
• The lease does not require it. Some older leases rely on the statutory rules under the Law of Property Act 1925 and the Landlord and Tenant (Covenants) Act 1995, under which the benefit and burden of the lease covenants pass automatically to the new owner. No deed is needed.

Your solicitor will identify which category applies to your lease when they prepare the contract pack. Do not assume either way until they confirm.

How it interacts with the licence to assign

A licence to assign is the freeholder’s formal permission for the lease to be transferred to the new owner. It is a separate document from the deed of covenant but often arranged together, because both are triggered by the same event — the sale.

Depending on the lease, you may need:

• Only a deed of covenant.
• Only a licence to assign.
• Both, prepared as separate documents.
• Both, combined into a single tripartite deed signed by buyer, seller and freeholder.

In practice, the freeholder’s solicitor will follow whichever format they use for that block or estate. Your solicitor simply needs to know the fee, who signs, and the expected turnaround.

How much does a deed of covenant cost?

The buyer pays the cost. It is part of the transaction costs that fall on the incoming owner, not the outgoing one. Typical fees break down as follows:

These charges appear on the freeholder’s side of the transaction, not the seller’s. The seller’s responsibility is to ensure the freeholder’s fee schedule is available early so the buyer’s solicitor can budget for it. Many sales stall at this point because the freeholder’s fee is higher than the buyer expected. For more on the wider fee picture, see our guide to leasehold management pack costs.

How long does it take?

Two to six weeks is the realistic range. The freeholder’s solicitor typically prepares the deed in one of three forms:

1. Standard template, issued on request. Fastest path: the deed can be drafted, sent to the buyer’s solicitor, signed by the buyer, and returned within two weeks.
2. Bespoke deed per transaction. Slower: the freeholder’s solicitor prepares from scratch, adds review time, and may go through multiple revisions. Four to six weeks is common.
3. Deed dependent on management pack being issued first. The freeholder may refuse to start the deed until the leasehold management pack has been ordered and paid for, adding the management pack lead time (often 10 to 30 working days).

The single biggest controllable factor is how early the process starts. If your solicitor raises the deed of covenant request immediately after an offer is accepted, you are working to the buyer’s timeline, not bolting it on at the end. Our guide to chasing the freeholder for a management pack applies equally to chasing a deed of covenant — the same tactics work.

What sellers should do to keep it on track

Although the deed itself is between the buyer and the freeholder, sellers have more influence over timing than they think. Specific steps that help:

• Identify the requirement before listing. Ask your solicitor to review your lease for deed of covenant clauses when you instruct them, not when a buyer is lined up.
• Get the freeholder’s fee schedule up front. Many freeholders publish their sale-related fees on request. Having the figure pinned down early avoids nasty surprises.
• Order the management pack immediately on offer acceptance. Most freeholders require this to be in place before they will engage on the deed of covenant.
• Use your solicitor as a single point of chase. Do not let your estate agent and solicitor both chase the freeholder independently — pick one, usually your solicitor, and give them a firm deadline.
• Escalate politely but early. If the freeholder’s solicitor is unresponsive for more than two weeks, escalate to their managing agent or, if necessary, to the freeholder directly.

Common reasons a deed of covenant delays a sale

Our experience, and industry reports from the Leasehold Advisory Service (LEASE), consistently point to the same handful of friction points:

The freeholder is unresponsive

The freeholder’s managing agent takes weeks to respond to requests. This is the single most common cause of delay. The remedy is to start the request early and escalate via correspondence if response times slip beyond two weeks.

The fee is higher than expected

The buyer’s solicitor receives a fee quote that feels excessive and queries it. Negotiation can take a further one to two weeks. Getting the fee schedule up front avoids this.

The deed is drafted with unusual terms

Occasionally the freeholder’s solicitor includes clauses that go beyond the lease (for example, requiring the buyer to take out specific insurance with a named insurer). The buyer’s solicitor will rightly push back, adding to the timeline.

Disagreement over who signs

Where a residents’ management company exists alongside the freeholder, both may need to be parties to the deed. Confusion over who signs and in what order adds delay.

What happens after the deed is signed

Once the buyer has signed the deed and the freeholder has countersigned (and received their fee), the deed is registered as part of the transfer at HM Land Registry. The buyer’s solicitor submits it alongside the TR1 transfer deed, the stamp duty return, and any other required documents. From the seller’s point of view, once the deed is in place and funds have transferred, completion can happen on the agreed date. For a walk-through of completion itself, see our guide to what happens on completion day.

Related legal requirements sellers should know

The deed of covenant is one of a set of leasehold-specific requirements that all intersect during a sale. The others worth knowing about include:

• Licence to assign — separate consent to the sale from the freeholder.
• Notice of transfer and charge — formal notices served on the freeholder after completion to update their records.
• Apportionment of service charge — split between seller and buyer as at completion day, dealt with in the completion statement.
• Section 20 consultation documents — if major works are in progress or anticipated, copies must be included in the management pack. See our guide to Section 20 notices when selling a flat.
• Landlord and Tenant Act implications — service charge consultation and rights of first refusal can both affect a sale. See our Landlord and Tenant Act seller’s guide.

Sources and further reading

• The Law Society — Leasehold sales guidance and standard conditions (lawsociety.org.uk)
• Leasehold Advisory Service (LEASE) — Free advice for leaseholders on sale administration, deeds of covenant and licence to assign (lease-advice.org)
• HM Land Registry — Registration of leasehold transfers and supporting deeds (gov.uk/government/organisations/land-registry)
• UK Finance Lenders’ Handbook — Requirements for leasehold sales and deeds of covenant (cml.org.uk/lenders-handbook)
• Leasehold Reform (Ground Rent) Act 2022 andLeasehold and Freehold Reform Act 2024 — Statutory framework (legislation.gov.uk)

Related guides

• Selling a Leasehold Flat: Complete Guide
• Leasehold Management Pack Cost Explained
• How to Chase Your Freeholder for a Management Pack
• Freeholder Not Responding: What to Do
• Defective Lease: What It Means and How to Fix It
• Landlord and Tenant Act: Seller’s Guide
• Section 20 Notice When Selling a Flat
• Selling a Property With a Short Lease

Frequently asked questions