Issue with Freeholder not varying my lease individually

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    Issue with Freeholder not varying my lease individually

    I got permission from my freeholder in April 2018 and again in May 2019 to undertake internal reconfiguration works and subsequently let (what was a 2 bedroom maisonette) as a 3 room HMO. The flat in question is the first and second floor of a converted house containing 2 flats in total. The works are now complete and cost £60 000. I have a HMO license from the local council and a Certificate of Lawful development for the change of use from (C3 to C4). My solicitor informed me that in order to refinance my property I will need a lease variation adding the HMO use class. When I approached the freeholder to facilitate this his solicitor advised him that both leases's will need to be varied. Another solicitor told me that only my lease needs to be varied as the downstairs has no grounding to sue for breach of lease if the freeholder has granted me the additional use class within a lease variation. However, the freeholders solicitor remains firm in her view that both leases's must be varied. I spoke with the leaseholder downstairs who has forwarded the proposal to his solicitor as he has no experience of these matters; although he did express concern about the affect of having a HMO above him and the potential negative affect on re-sale. What options do I have available if the other leaseholder is unwilling to have his lease varied and the freeholder withdraws the consent to let as a HMO (he has currently done this pending the downstairs leaseholders agreement to the variation?) Can I take action against him for having initially agreed the change of use? I will be facing real financial hardship if I can not let the property as a HMO after spending considerable money on the works and evicting the tenants.

    #2
    We'd need to see both leases. It is possible that the other flats lease contains a covenant from the freeholder requiring them to enforce equivalent terms in your lease. If that is the case, the freeholder would be in breach of the other lease, if they made your lease different.

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      #3
      Hi. Thanks for your reply. I have had both leases looked at by a solicitor who has said they are pretty much the same. The only thing they picked up on with the other lease was a covenant stating they could enforce action against the freeholder if the other leaseholder (me) was using the property outside of the appointed use class (single family dwelling in this case). I would be happy to send you a copy of my lease and can order a copy of the other properties lease if that helps.

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