Can majority freeholders/directors change own Lease

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    Can majority freeholders/directors change own Lease

    Hello,
    I am new to freehold so please bare with me.....I have just purchased a flat. I am a shareholder and director and I plan subletting the flat out. The Lease states that consent is required and a reasonable fee needs to be paid to the managing agent who is managing the property. Could we collectively decide to pay £0 for sub letting fees and ignore window cleaning clause?

    #2
    How many flats, shareholder and directors are there? Consent will be required however it can not be unreasonably withheld.

    Comment


      #3
      You cannot remove obligations in the the lease that you have to other leaseholders without either their consent or a tribunal ruling. There are limited circumstances in which the latter option applies. A majority only allows you to ensure that the freeholder gives consent. It doesn't override objections by leaseholders who aren't shareholders, or didn't agree to the decision.

      There will be conveyancing costs involve in a lease change.

      The right to reject sub-lets is a valuable protection against, for example, a landlord who doesn't want to get their hands dirty, entering a rent to rent agreement with a housing association, who then install anti-social tenants. It also allows you to check that tenancy agreements don't allow tenants to beach terms of the lease. Vetting tenancy agreements takes time, and any managing agent will not do that for free.

      I have no idea what your window cleaning clause is.

      https://www.lease-advice.org/article...freehold-flat/ stresses that share of the freehold companies are still bound by the terms of the lease, and by landlord and tenant law.

      Comment


        #4
        leaseholder64,

        Would that be a conflict of interests situation where the Lease states they need to pay a reasonable fee?

        Comment


          #5
          Are you director of the Residents Management Company or the Company owning the freehold title ? How many BTL flats in the block ?

          Comment


            #6
            In most companies, the board, and certainly the majority of members, can waive conflicts of interest.

            In any case, I'm not sure were the alleged conflict of interest lies.

            Comment


              #7
              Originally posted by Gordon999 View Post
              Are you director of the Residents Management Company or the Company owning the freehold title ? How many BTL flats in the block ?
              I own the freehold with the other shareholders equally through a ltd company, I am a director and a leaseholder.

              Comment


                #8
                Originally posted by leaseholder64 View Post
                In most companies, the board, and certainly the majority of members, can waive conflicts of interest.

                In any case, I'm not sure were the alleged conflict of interest lies.
                So can the director with the conflict of interest....me letting out a flat and I am not wanting to pay assign to let fees not be permitted to vote on this? Could other director...there are only two say its ok?

                Comment


                  #9
                  The other directors can waive administration charges, but not service charges.

                  However, they still have at least a moral duty to verify that you are letting to a suitable person on suitable terms, and, in particular, that you won't cause the insurance policy to be voided.

                  Comment


                    #10
                    Note that they are not changing the lease, they are simply waiving a requirement to comply with the lease on one occasion.

                    Comment


                      #11
                      The question states that the fee is payable to the MA. If there is no MA no fee is payable.
                      If there is an MA and you seek to reduce the income of the MA it will most likely look to increase its income by other means.
                      In general terms the lease confers a right to the freeholder but the freeholder is not obliged to exercise that right unless a party to the lease requires it to do so and indemnifies the freeholder for any costs involved. The MA is not a party to the lease therefore it cannot require the freeholder to exercise it's right.
                      The obvious way to remove the right is to complete a Deed of Variation signed by all parties.
                      Alternatively the directors can decide to reduce the fee or not to charge it on each occasion or until further notice. Conflicts of interest should be declared and may prevent a director from voting depending on the Articles. That can be circumvented by amending the Articles or dealing with the fee for each lease separately.

                      Comment


                        #12
                        If there is an MA involved you should consider the management agreement and what has been agreed regarding letting fees

                        Comment

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