Is Undertenant Liable for Superior Landlord's Consent Fees?

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    Is Undertenant Liable for Superior Landlord's Consent Fees?

    We are 'Undertenant' for an Underlease. .


    Leaseholder / Lessor is 'Tenant', who is our 'Immediate Landlord'.


    And there is a 'Superior Landlord' who is the freehold owner.


    During our negotiations with Immediate Landlords regarding obtaining Sublease, it was agreed between us that each party will bear its own costs and we will not bear Superior Landlord's cost of consent to be given to us. Our Immediate Landlord will bear that cost of obtaining the consent for us, as per the Headlease terms which say that Tenant is liable for all Landlord cost for variations to the lease.


    After the Underlease was executed and delivered, our Immediate Landlord asked us to pay Superior Landlord's legal and surveyors fees for License to grant us Underlease.


    When we questioned that this was not agreed in negotiations, they said that all previous terms agreed or understandings in negotiations were null and void, and final Underlease terms are the only agreement between us and pursuant to 14.1(e) and 14.2 of the Underlease linked here: [goo.gl/a2Mbk7], we were responsible for costs of ...any consent or approval applied for under this lease...


    We have objected that to us this interprets as any costs of future consents etc. after the execution and delivery of the Underlease and not before, but the our Immediate Landlord is adamant that we must pay the £2,000+vat it has had to bear in obtaining license to sublet for us.


    My question is:
    1. From what I have attached, is our immediate landlord correct?
    2. Are we liable to pay for license to underlet, even though we never agreed anywhere that we will do so?
    3. Do the 14.1(e) and 14.2 of the attached from the Underlease apply to events after the grant of sublease to us or do it include the time period before the grant?




    #2
    Usually complex lease negotiations are handled by a solicitor who should be able to advise you if costs are payable or not.

    The building has a headlease between Lessor ( freeholder ) and Lessee ( headlessee ) . How many years term under the headlease and what was starting date ? This property title is registered at Land Registry ? Is the headlease for "land only" or for " Land + building "

    Your leasehold flat has a "underlease" between the Lessor (headlessee ) and the lessee ( You ). How many years term does "underlease" give and what was the starting date ? This property title was registered at Land Registry to transfer previous name to under your name as the title holder ? What was your starting date ?

    You have negotiated a new "sublease" to replace the "underlease" ? What is the length of the sublease extend beyond ? Is the sublease specifically for subletting ?

    Paying £2K for licence fee to sublet seems totally excessive . Is your flat in an over 60s retirement estate ?

    Are the "freeholder" and "Headlessee" companies related and using the same registered address ?

    Comment


      #3
      The answer to all three questions is "no".

      Your interpretation of the lease is correct. The costs of the licence to grant the underlease are not costs arising for a consent under the underlease - they arise under the headlease. Since you have not otherwise agreed to pay the costs there is no obligation to pay them.

      It is generally the case that in intrepreting any final document the negotiations should not be brought into evidence. However, the negotiations become relevant if, rather than the problem being one of interpretation, the document fails correctly to record what the parties understood to have been agreed immediately before the document was completed. Even if the costs were covered by clause 14.1 you would have a strong case for arguing that the underlease should be rectified to exclude them. However, the point is somewhat academic as the underlease does not in fact require you to pay them.

      Comment


        #4
        Lawcruncher,

        Thank you so much for the reply. I appreciate your sincerity.

        Many thanks and a happy new year to you.

        Comment

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