Couple of Questions relating to Freeholder asking for sublet fees

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    Couple of Questions relating to Freeholder asking for sublet fees

    First of all my apologies if a longer version of this post appears elsewhere on the forum - for some reason it was flagged as Spam topic, and been held in moderation, so I thought I would try to condense the topic here again!


    My property (a buy to let apartment) bought new a few years ago from a well known Housebuilder had its freehold sold to a third party landlord at a later date. When the freehold was sold it became managed by an well known, in these circles, agent. Whilst the house builder owned the freehold, the flat's subletting was never questioned nor were sublet fees demanded - even though they were well aware and informed that the property was to be sublet from the outset.

    My lease does not ask for consent to sublet, but does mention, under a section entitled "DISPOSALS" : notifying the freeholder (or their agent) of "underletting transfer assignments" along with a fee of not less than £100.

    Anyway, the current AST (which is quite long term, having started before the freehold was sold and this agent took over) has now become known to the agent - or at least they know the property is sublet.

    The agent has written to me to ask for fees of in excess of £100 (for a new tenancy) and a further, smaller fee for each renewal and to register the sublet using a pre-printed form. Even more worrying they have asked me to list all previous tenancies not already registered with them. This could add up to quite a lot of money.

    Now, I am reluctantly prepared to pay them to register the current sublet as it has been running for a while "on their watch". If I have to, I will also pay them to register the current tenant's renewal.

    My questions:

    - Am I obliged to list the previous tenancies of people who left long before this agent had any interest whatsoever in my property? How could I have even notified them as the house-builder still owned the freehold back then and, in my naivety, I didn't even know the freehold was to be sold or of the existence of this agent (oh happy days).

    - Am I already preparing to pay too much - paying each time a tenant renews seems excessive - why is this even required if the tenant or terms of the AST have not changed?

    Thanks all - I appreciate the time taken to read my post.

    #2
    Pete, I am a bit confused..... you posted a year ago with a similar issue. What happened then? Did you register your sub letting tenancy with this agent?

    Comment


      #3
      Thanks Scriv - Yes - they do know. My own fault really, as the agent wrote a few weeks ago said I needed to inform them if it was sublet. Thinking honesty was the best policy and knowing consent is not required in my lease, I informed them it was - then I thought nothing of it until the demand for payment etc. appeared...

      Comment


        #4
        ... I didn't end up informing them a year ago - heard nothing from them until just recently.... and then I responded, now the fees...

        Comment


          #5
          Yes, this is their pattern of working. A generic 'fishing' letter asking you to fill in their forms and send them their fees otherwise you will be in breach of your lease until you have fulfilled their demand.

          Be prepared for a lengthy chain of correspondence if you decide to argue your case as per the exact terms of your lease and to challenge the fees they are asking.



          Comment


            #6
            I presume you mean £130!

            Comment


              #7
              You can buy a copy of the freehold title for your flat from Land Registry Online for £3 by credit card and check when the freehold title was sold . Before sale , the leaseholders should have been given Right of First Refusal to buy the freehold.

              You should make complaint to your local MP about the charge for subletting. An AST letting agreement is not a disposal of the property.

              Comment


                #8
                Leaseholder64 - not a bad guess!

                Gordon999 - Thanks - yes we were offered the freehold (as a collective of all owners of the properties in a block of flats) but we didn't (again naively) take this further - it would have been complex given the number of absent owners etc anyway - but thanks for the info.

                Yes, I remember on my original post from last year (before the agent contacted me with the fees) you mentioned an AST is not a disposal of the property. It sounds like you are saying that, possibly, no fee is payable at all because the underletting notification requirement is under the lease clause title of "DISPOSALS"... this seems short sighted by the lease creator (as they probably knew they were going to sell the lease on) .... but possibly good news for me.

                Can you point me in the direction of any more information to about the title of "DISPOSALS" in a lease (or provide any more on this on this would be useful ).

                Would you also agree with me that I am also under no obligation to list the previous tenancies (from before the agent was involved)... I can see why they are asking for this, but obviously it is not information I would be comfortable giving them for all sorts of potential fee demanding reasons!

                Thanks again.

                Comment


                  #9
                  Titles in legal documents normally have no significance. They are just there to help you find the right place.

                  If the text requires a fee on underletting, an AST is such an underletting.

                  The exception might be if the text is ambiguous, in which case the title might be used to hint at the real intent.

                  Comment


                    #10
                    I certainly don't tell S&M about previous tenancies. I suggest you don't either.

                    If you copy out the full paragraph from your lease, we can analyse it to see if you need to pay anything at all.

                    Comment


                      #11
                      Here's the only part of the lease which refers to sublets:

                      Disposals

                      (a) Not to transfer underlet or otherwise part with possession of part only of the Property

                      (b) Within one calendar month of every transfer underletting assignment other form of disposal mortgage or legal charge of this Lease of the Property and also of every Grant of Probate or Letter of Administration Order of Court or other instrument effecting or evidencing a devolution of the title of this Lease being executed or operating or taking effect or purporting to operate or take effect to provide the Company's solicitors or agents and the Management Company's solicitors with a certified copy for the purpose of registration and to pay the solicitors or agents for the Company a reasonable fee of not less than £100 per notice (together with any Value Added Tax which may be payable in respect thereof) and if appropriate to pay the Management Company such reasonable fee as the Management Company shall require (together with any Value Added Tax which may be payable in respect thereof)


                      Thanks for all your comments.

                      Comment


                        #12
                        Oh, well just send the £100 when you first let to someone, but not for any subsequent periodic tenancy. (They'll try to get a further £100 every so often, but I tell them they're out of luck.)

                        (Cross out any bits of the form you don't agree to, and take a photostat.)

                        Comment


                          #13
                          Who controls the Management Company in your building ? Are you a member of the Management Company ? Its unusual for a Management Company to demand extra fees if they are not an original party to the lease.

                          The sections (a) and (b) comes under the heading of "disposal" which I believe must means "disposal of property title".

                          The first line in part (b) reads :

                          "(b) Within one calendar month of every transfer underletting assignment other form of disposal" must be clear to any solicitor it refers to disposal of the title.

                          There is nothing in the wording to require registration of AST agreement ( which is not an agreement to dispose of your property title.) . If you keep the AST agreement to one year less one day ( 364 days) you cannot be accused of disposing of your lease.

                          Thats my 2p worth of comment from a lay person.

                          Comment


                            #14
                            An AST is an underletting.

                            Comment


                              #15
                              Hi - I recall reading about this and I just googled and found the following article which might be helpful

                              https://www.leaseholdknowledge.com/s...-land-tribunal

                              With luck if you quote the above you might reduce your obligation to £40 - the alternative is to simply continue to ignore all correspondence and see what evolves. That is not advice by the way, just an option as they might give up after a while. Personally I think that asking for details of all previous tenants just to procure further income is a cheek.

                              There is a lot of 'bad press' about this lately there are even cases of housebuilders selling what should be freehold houses as leasehold to create extra profit. One of the major housebuilders built in ground rent renewals that doubled every 10 years and has rendered property worthless. Work it out for yourself take £200 ground rent double it every 10 years it gets to £51,200 annual ground after 80 years. See this link it is frightening

                              https://www.theguardian.com/money/20...yers-leasehold

                              Solicitors for the initial sales obviously overlooked this clause but it seems anyone buying a leasehold property needs to be extremely careful and read the lease in detail



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