Leaseholder Sub-subletting...?

[bigalxyz]

I'm involved in the management of a leasehold property. One of the flats in the property has been let on a room-by-room basis (with an HMO licence from the local council) - seemingly in breach of the lease wording.

However the leaseholder has now denied that he is letting on that basis. In a different email (which I initially thought he had mistyped, but perhaps not) he said that his only tenant is the letting agent...

On the face of it, this seems to suggest that he has sublet his whole flat to a letting agent; and that the letting agent has "sub-sublet" it out as individual rooms. I've never heard of an arrangement like that though. Is it possible?

Thanks.

[theartfullodger]

Yes, entirely possible. And legal. Unwise usually, as the property owner-leaseholder has little or no control over who is in property or how many.

Suggest speaking with HMO dept council: Normally HMO licence should be in name of landlord: In this case the letting agent. Such a shame if council shut it down - they have the powers.

NB There are at least 3 landlords in this case: Freeholder (whole block): Leaseholder (that flat) - but he has a tenant, letting agent; Letting agent is landlord of occupants - but agent also tenant of leasholder.

Maybe re-read lease and see if that complies?

[Lawcruncher]

What does the lease say about sub-letting?

[bigalxyz]

Yes, entirely possible. And legal. Unwise usually, as the property owner-leaseholder has little or no control over who is in property or how many.

Suggest speaking with HMO dept council: Normally HMO licence should be in name of landlord: In this case the letting agent. Such a shame if council shut it down - they have the powers.

NB There are at least 3 landlords in this case: Freeholder (whole block): Leaseholder (that flat) - but he has a tenant, letting agent; Letting agent is landlord of occupants - but agent also tenant of leasholder.

Maybe re-read lease and see if that complies?

Thank you. Yes, I'm going to re-read the lease today. Had the leaseholder been the one to let room by room it would have been a clear breach of the wording, but if someone else is doing it on his behalf...I'm less sure.

[bigalxyz]

What does the lease say about sub-letting?

Lease says subletting is allowed subject to certain conditions (broadly speaking, must be an AST covering the whole flat, let to a single household). I need to read it again today to see if he has breached that in subletting to a letting agent; and furthermore if any more breaches as a result of the letting agent "sub-sub-letting" (is there a proper term for this?)...time to grab my reading glasses I think...

[Lawcruncher]

As you use the words "broadly speaking" I think I would like to see exactly what the relevant clause says - there may be some devil in the detail.

[bigalxyz]

As you use the words "broadly speaking" I think I would like to see exactly what the relevant clause says - there may be some devil in the detail.

Indeed there may...am going to check the details later today to make sure I know what's what.

[leaseholder64]

The current first level sub-let is not an AST!

Unless there is devil in the detail, this is enough to create a breach.

However, you may also find wording that requires leaseholders to ensure that anyone who gains access under them also obeys the lease.

[Emilycarter]

We had a Leaseholder doing something very similar. Flat had been let as a 'rent to rent'. We had a clause in the Lease saying that the property could only be used as a single family dwelling and they had to revert to letting as such. Hopefully there may be something similar in your Leases.

[bigalxyz]

ok so...here are the bits of the lease that I think are of interest here (in the order that they appear):

=========================

"Not to do or permit or suffer any act or omission which may render any increased or extra premium payable for the said insurance of the Development or any part thereof or which may make void or voidable any such insurance or the insurance of premises adjoining the Development and so far as the Tenant is liable hereunder to comply in all respects with the reasonable requirements of the insurers with which the Development or any part thereof may for the time being be insured"

[relevant since placing insurance is proving tricky because of the confusion over the occupancy of this one flat]

=========================

"Forthwith to make good to the Management Company or the Landlord all loss or damage sustained by the Management Company or the Landlord consequent upon any breach of the last mentioned provision [referring to the para above]"

=========================

"Except for installing in a careful manner normal residential fittings not to cut maim or injure not to make any breach in any part of the structure of the Demised Premises nor without the previous consent in writing of the Management Company or its agents to make any alteration whatsoever to the plan design or elevation of the Demised Premises nor to make any openings therein nor to open up any floors walls or ceilings for the purpose of altering or renewing any pipes wires ducts or conduits nor to alter any of the Landlord's fixtures fittings or appliances therein AND ALSO not in any case to commit or allow any waste or spoil on or about the Demised Premises nor to display or hang any window boxes clothes washing satellite dishes or any other similar telecommunication transmission or reception apparatus or thing from the Demised Premises (except aerials placed there by the Landlord or the Management Company)."

[relevant since prior to letting room by room he took a 2 bedroom flat and made internal layout changes (without seeking consent from the management company) to turn it into 4 bedrooms]

=========================

"Not at any time during the said term to sub-let the whole of the Demised Premises except by an assured shorthold letting agreement of the whole of the Demised Premises only or other with the prior written consent of the Management Company (such consent not to be unreasonably withheld or delayed)"

=========================

"Not to use or suffer to be used the Demised Premises for any purpose whatsoever other than as a private residence for occupation by a single family and in particular not to carry on or permit or suffer to be carried out in or from the Demised Premises any trade business or profession"

[jpkeates]

The lessee of the property is in breach of both of the last two terms.

A let to an "agent" who doesn't live there can't be an Assured Shorthold letting arrangement. An Assured Shorthold Tenancy requires the property to be let to human beings (not companies) one of whom lives there. There's a slight ambiguity because the wording "assured shorthold letting agreement" isn't perfect - but it's pretty obvious what it means.

The lessee is "suffer[ing]" the property to be used for a purpose other than "as a private residence for occupation by a single family" which is also a breach.

The agent has probably assured the lessee that this is common and OK (the former is correct, the latter isn't). What will be a problem for the lessee is if the agent simply ends their own tenancy without removing the occupants - they would then become tenants of the lessee, who would have to go to court to remove them - which would be costly and difficult - particularly as they probably wouldn't have access to the original documentation.

So the lessee is stuck between a rock and a hard place.

[bigalxyz]

The lessee of the property is in breach of both of the last two terms.

A let to an "agent" who doesn't live there can't be an Assured Shorthold letting arrangement. An Assured Shorthold Tenancy requires the property to be let to human beings (not companies) one of whom lives there. There's a slight ambiguity because the wording "assured shorthold letting agreement" isn't perfect - but it's pretty obvious what it means.

The lessee is "suffer[ing]" the property to be used for a purpose other than "as a private residence for occupation by a single family" which is also a breach.

The agent has probably assured the lessee that this is common and OK (the former is correct, the latter isn't). What will be a problem for the lessee is if the agent simply ends their own tenancy without removing the occupants - they would then become tenants of the lessee, who would have to go to court to remove them - which would be costly and difficult - particularly as they probably wouldn't have access to the original documentation.

So the lessee is stuck between a rock and a hard place.

Thanks. I think I need to find out more about the nature of the relationship between leaseholder, letting agent and tenants - who has signed what, etc. I suspect I'll be met with a wall of silence however!

[jpkeates]

You don't have to find out anything really.
There is either more than one person living there who aren't part of a single family or there isn't.
Given that someone has licensed the property as an HMO, which wouldn't be necessary for a single family, I think it's obvious.

If it is the case, the lessee is suffering that to occur if they don't act to stop that being the case when it's brought their attention and is in breach of their lease.
The lessee can then either show that you're wrong about the situation or change it.
It's not up to you to investigate or do any legal forensics.

The lease should tell you what to do in the event of a breach or perceived breach and the terms of the management agreement should confirm any steps you need to take first.