Barclays is saying that it will not proceed with the mortgage unless the lease contains a mortgagee protection clause (sometimes called a mortgage protection or lender protection clause).
This clause is intended to protect the lender if the lease is forfeited or ended because of a breach. Depending on its wording, it may require the landlord to notify the lender and give the lender an opportunity to remedy the breach before the lease is terminated. Without suitable wording, the lender may consider its security over the property insufficient.
What the email confirms
- You told Barclays that the lease does not contain the clause.
- Barclays replied on 1 October that it cannot proceed unless the clause is included in the lease.
- The message appears to state a lending requirement; it does not, by itself, amend the lease or add the clause.
Practical next steps
- Ask your conveyancer to check the lease and confirm exactly what protection, if any, it already provides.
- Ask Barclays or its mortgage team for the wording it will accept, or ask whether it will accept another form of protection.
- If a lease amendment is needed, your conveyancer can contact the landlord or managing party and advise on the required consent, costs, and timing.
- Do not assume that a side letter or other document will be acceptable unless Barclays confirms this in writing.
Because the bank’s requirement and the legal effect depend on the lease wording and the transaction, ask your conveyancer to advise you before agreeing to an amendment or incurring costs.