Subletting consent/registration fee challenge

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    Subletting consent/registration fee challenge

    Hi all,

    Recently Recieved a fishing letter from management company XXX requesting for payment of subletting consent of £130 (paper form) or £95 (online application).

    My lease (below) require me to obtain prior written consent of the manager before I can sublet the property. But it doesn't mention about £130 or £95 admin fees.

    Clause 25.1 of my lease:
    Under-let the whole or any part of the Demised Premises save that an under-letting of the whole of the Demised Premises is permitted in the case of an assured shorthold tenancy agreement (or any other form of agreement which does not create any rights of tenancy for the tenant) with the prior written consent of the Manager or its agents (such consent not to be unreasonably withheld or delayed)

    Clause 27 of my lease
    Within one month after the date of any and every assignment transfer mortgage charge under-lease of the Demised Premises for any term assignment of such under-lease or grant of probate or letters of administration order of court or other matter disposing of or affecting the Demised Premises or devolution of or tranfer of title to the same to give or procure to be given to he Manager notice in writing of such dealing aforesaid with a certified copy of the instrument effecting any such dealing and AND ALSO to pay or cause to be paid at the same time to the Manager such reasonable fee appropriate at the time of registration in respect of any such notice examination of documents and registration affecting the Demised Premises PROVIDED ALWAYS that in the case of contemporaneous transfer and mortgage the fee shall ony be payable on one of such matters"


    So I have gone back to the management company XXX and quote the case of "HOLDING AND MANAGEMENT (SOLITAIRE) LIMITED vs CHERRY LILIAN NORTON" and told them that "a fee greater than £40 plus VAT could not be justified including retrospectively". I have also included a £48 cheque in my letter to them as the payment of sublet consent fee.

    Today I receive a reply from the management company as the following, which challenge the law case above and requesting me to pay the £130.

    I definitely think £130 is unreasonable, and anyone has any idea on how to deal with the following please?

    "We write further to your letter dated 2 May 2019 in relation to subletting the above mentioned property.

    Please note that there is a variety of conflicting case law on administration charges and decisions made by the Lands Tribunal, including those decisions by the Upper Chamber, are decided on a case by case basis and are determined by what is reasonable in the circumstances of each individual case. As such the decision you are referring to is not legally binding or enforceable in relation to consent and registration fees and has since been overtaken by a raft of decisions such as those in Crosspite vs Sachdev (dated 25 September 2012), Freehold Managers (Nominees) Ltd v Piatti (dated 6 November 2012) and most recently in Proxima Properties Limited vs McGhee (6 February 2014). In the first two cases the Upper Chamber determined, that £165 was a reasonable initial consent fee to sublet, and in the latter case the Upper Tribunal found that it had no jurisdication over registration fees.

    We kindly refer you to clause 25.1 (see above) of the lease which states you are not to sublet the property without the prior written consent of the Manager.

    Please be advised that Section 158 of the Commonhold and Leasehold Reform Act 2002 permits an administration charge to be charge for the provision of documents on behalf of the landlord. As such we would not be able to issue the consent without our fees.

    In addition to this we refer you to clause 27 (above) of the Lease which states you are to serve notice to the Manager within one month of every underletting of the premises and to pay the Manager a reasonable fee for registering such notice.


    Our client's reasonable fee is £130. We wish to reassure you that we regularly review our fees to ensure that our costs are recouped whilst maintaining a suitable level of service to our clients and lessees at a reasonable charge.

    Our fees are charged in connection with considering a request for consent, checking the lease terms, reviewing the application form completed by the lessee, liaising with property managers where appropriate, updating electronic records and holding these securely together with issuing documentation to the lessee confirming the landlord's consent or registration of the arrangement. As far as we are aware these fees are sandard across the industry and are reasonable.

    We are therefore entirely comfortable and confident in our client's legal position that the £130 to register your sublet is due and payable under the lease and is not a matter that is within the Tribunals jurisdiction."

    #2
    Oh, well either pay up or go to the FTT, like I did in the case you mention.

    Comment


      #3
      Clause 25.1 does not give the right to the landlord to charge a fee and the condition is therefore unreasonable. The landlord is not to withhold consent unreasonably and as he has imposed an unreasonable condition, there is no obligation for you to obtain the consent to the particular underletting at all.

      Clause 27 does not mention under lettings

      Comment


        #4
        Clause 27 does mention underlettings (using the word under-lease.

        Comment


          #5
          I read clause 27 to refer to the disposal of all or part of the premises. The term under-letting was used in clause 25 and the draftsman would surely have used the same term if that was intended to be included under clause 27.

          Comment


            #6
            Thank you Leaseholder64 and Eagle2 for your advice. I think I should reproduce the complete relevant lease terms here, so we can clarify the requirements:

            Please see extract below:

            Clause 25.1:
            Under-let the whole or any part of the Demised Premises save that an under-letting of the whole of the Demised Premises is permitted in the case of an assured shorthold tenancy agreement (or any other form of agreement which does not create any rights of tenancy for the tenant) with the prior written consent of the Manager or its agents (such consent not to be unreasonably withheld or delayed)

            Clause 25.2
            Grant any under-lease of the whole or any part of the Demised Premises save that an under-lease of the whole of the Demised Premises is permitted with the prior written consent of the Manager or its agents (such consent not to be unreasonably withheld or delayed)

            Clause 25.3
            Separately assign transfer or part with the possession or occupation of any part or parts of the Demised Premises but only to assign transfer or part with the possession thereof as a whole and not to assign transfer or part with the possession or occupation of the Demised Premises during the last seven years of the Term without the prior written consent of the Manager or its agents (such consent not to be unreasonably withheld or delayed)

            Clause 27
            Within one month after the date of any and every assignment transfer mortgage charge under-lease (including any immediate or derivative under-lease) of the Demised Premises for any term assignment of such under-lease or grant of probate or letters of administration order of court or other matter disposing of or affecting the Demised Premises or devolution of or tranfer of title to the same to give or procure to be given to he Manager notice in writing of such dealing aforesaid with a certified copy of the instrument effecting any such dealing and AND ALSO to pay or cause to be paid at the same time to the Manager such reasonable fee appropriate at the time of registration in respect of any such notice examination of documents and registration affecting the Demised Premises PROVIDED ALWAYS that in the case of contemporaneous transfer and mortgage the fee shall ony be payable on one of such matters"

            Comment


              #7
              Originally posted by eagle2 View Post
              I read clause 27 to refer to the disposal of all or part of the premises. The term under-letting was used in clause 25 and the draftsman would surely have used the same term if that was intended to be included under clause 27.
              I think you are right here, only clause 25.1 refer to "under-let" and clause 25.2-25.3 and 27 all talking about "under-lease".

              What is the difference between underlet and underlease?

              Comment


                #8
                under-let is the verb for creating an under-lease. Under-lease is a noun.

                Comment


                  #9
                  An under-let is subject to a renting agreement and an under-lease is subject to a leasing agreement, the contractual commitments are different.

                  I think that you only need to seek consent to letting under clause 25.1 which does not permit the landlord to charge a fee. The landlord cannot set a condition which imposes an additional obligation upon you. The fee charged appears to be unreasonable in any case.

                  Comment

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