Difference between an Underlet and Underlease?

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    Difference between an Underlet and Underlease?

    Hi All,

    First time posting but I've tried searching for an answer on the difference between an Underlet and Underlease?

    There are two clauses in my lease which are slightly confusing;

    c) Within one calendar month after any underletting for a period in excess of 12 months of the whole of the demised premises to give notice in writing to the landlord providing the date of commencement of the underletting and name(s) of the undertenant(s);

    d) Within one calendar month after any such document or farm as is hereinafter mentioned shall be executed or shall operate or take effect or purport to operate or take effect to produce to the Landlord's solicitors every deed of transfer of this lease or mortgage or legal charge of this lease or the demised premises and also every underlease of the demised premises and also every probate letters of administration orders of court or other instrument affecting or evidencing a devolution of title as regards the term or any such underlease as aforesaid for the purpose of registration and for such registration to pay such solicitors a fee of thirty pounds plus Value Added Tax in respect of each such document or instrument so produced;

    If i rent the property on a 6 month shorthold tenancy do I need to register with the landlord? I initially read the above as only if the tenancy is more than 12 months as an 'underlet'. However I am reading that an underlease may also be a shorthold tenancy?

    If this is the case however, surely the two paragraphs contradict each other as I would have to notify (by registering) the landlord regardless of duration?

    Can any experts out there clarify the legal position for me?

    Many thanks in advance.


    #2
    I suspect a tribunal would rule that 6 or 12 month ASTs did not require notification, but greedy management companies would probably try to say they did.

    Comment


      #3
      Clause c) is amateurish drafting while clause d) is more professional. Presumably clause c) was added because someone thought it would achieve something useful. Whilst it achieves nothing so far as I can see, the two clauses are not incompatible.

      Clause c) requires notice to be given to the landlord if a subletting of the whole of the premises is made for a period exceeding one year.

      Clause d) requires notice to be given to the landlord’s solicitors if any of various events specified occurs and involves a document.

      Accordingly (ignoring what the position may be in relation to underlettings of part):

      · If you grant an underlease of the whole of the premises for a year or less orally no notice needs to be given to anyone.

      · If you grant an underlease of the whole of the premises for a year or less in writing notice needs to be given to the landlord’s solicitors, but not to the landlord.

      · If you grant an underlease of the whole of the premises for more than a year orally notice needs to be given to the landlord, but not to the landlord’s solicitors.

      · If you grant an underlease of the whole of the premises for more than a year in writing notice needs to be given to both the landlord and to the landlord’s solicitors.

      Comment


        #4
        Originally posted by JK0 View Post
        I suspect a tribunal would rule that 6 or 12 month ASTs did not require notification, but greedy management companies would probably try to say they did.
        Greedy management companies cannot claim a fee here as the lease provides for notice to be given to landlord and/or landlord's solicitors as the case requires.

        Comment


          #5
          Originally posted by Lawcruncher View Post

          Greedy management companies cannot claim a fee here as the lease provides for notice to be given to landlord and/or landlord's solicitors as the case requires.
          I think the "greedy management company" most people think of isn't, technically, a management company, but rather an agent for the freeholder.

          Comment


            #6
            1. If you are letting your property under a AST agreement, you can fixed the period up to "one year less one day" and you will not be required to serve an underletting notice and pay the registration fee.

            2. The "underlease" situation usually means disposal of the lease to another party. .

            Comment


              #7
              Sorry for the delay in replying however thanks all for your input. I spoke to the Leasehold Advisory Service in the end who told me an AST is indeed an underlease and therefore I am required to notify the Landlords Solicitors when an AST is executed regardless of period by providing a copy. The solicitors will of course notify the landlord (the managing agent as his agent) which makes the earlier paragraph near enough redundant. We had the lease re-written 10 years ago and clearly this was missed/ an oversight by the solicitors at the time! Not great really.

              Comment


                #8
                The AST letting for one year less one day is your best option to avoid having to serve notice.

                The AST letting agreement ( for one year) does not affect the leasehold title at Land Registry; and a rental agreement is not a transfer of the long lease title to the rental tenant which would require you to serve notice and pay £30 to the the landlord's solicitor.

                I believe AST agreements for 3 years or longer is entered as a deed and for such deed may require registration.



                Comment


                  #9
                  I have an AST in place for 6 months however as standard it becomes rolling after the 6 months is up. The issue is not over transfer of title as such, but of having an underlease in place which the lease advisory service told me an AST was. The wording quoted above refers to 'every underlease' or 'any such underlease' therefore according to the advisory service I am required to notify the landlords solicitors everytime a new AST is executed. I am only required to notify and give names in writing if the tenancy is for more than 12 months though this becomes somewhat redundant if the AST document has to be provided to the landlords solicitors (who will pass it on) anyway! This does all seem a bit silly but that is what I have been advised.

                  Comment

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