Permission to let problems

[sid1956]

Hi
Wondered if someone could help with some advice please.

My long leasehold flat has been rented for a few years. By oversight prior permission was not sought from freeholder in advance. The lease says that prior permission must be sought and a fee of £45 paid for each sublet. To rectify the situation (after threats from freeholder) I sent a cheque for £45 +VAT for each past sublet (x6). They responded saying the fee was now £175 per sublet. I declined to pay, arguing that the charge was not reasonable. This was about 1 year ago. I have since made another sublet and sent them a cheque for £45 +VAT for the new one (as per lease). They have replied that the fee is now £230 +VAT per letting. They are also claiming £800 legal costs which I have refused to pay.

The lease states the fee payable is : “£45.00 (or such higher sum as may from time to time be reasonably stipulated by the Landlord)”. (Lease date is 2014).

What would a reasonable fee be? How can this be established - or will I have to contest it at Tribunal?

Many thanks in advance.

[Gordon999]

Make a complaint to your local MP and ask him or her to join the APPG for Leasehold Reform.

Make a complaint to CMA which are collecting evidence for prosecution of some freeholders for leasehold abuse.

[TruthLedger]

Are you communicating with them via email? Keep hard copies of these exchanges as evidence.

[Lawcruncher]

“£45.00 (or such higher sum as may from time to time be reasonably stipulated by the Landlord)”

That gives you a choice. You either pay (a) £45.00 or (b) such higher sum as may from time to time be reasonably stipulated by the Landlord.

To whom does the lease say the fee is payable?

[Section20z]

Reasonable for a charge of £45 in 2014 would simply be plus 6 years RPI increase. So not £230 but is it worth arguing at FTT ? Probably not.
Personally I would ignore it and certainly not tell them every time you have a new tenant. How would they know ?

[sid1956]

Thanks Lawcruncher. The lease doesn't actually specify although it's pretty clear form the context that it's payable to Landlord. I wondered if there are any Tribunal cases I could cite. I think they are expecting to get away with unreasonable charges by making lease forfeit threats for breach of lease and hoping I won't want to fight.

[sid1956]

Section20z,

£230 +VAT every 6 months for doing nothing is excessive in my opinion and I can't afford it. And I don't want to have to lie. I'm quite happy to honour the lease and pay a reasonable fee. According to Bank of England £45 in 2014 is worth £50.76 in 2019.

[Lawcruncher]

The lease doesn't actually specify although it's pretty clear form the context that it's payable to Landlord.

Please quote the whole clause. You mention the fee is for permission, but it sounds more like a fee for registering notices.

I wondered if there are any Tribunal cases I could cite. I think they are expecting to get away with unreasonable charges by making lease forfeit threats for breach of lease and hoping I won't want to fight.

You do not need that. I repeat the comment I made above: That gives you a choice. You either pay (a) £45.00 or (b) such higher sum as may from time to time be reasonably stipulated by the Landlord. That is equivalent in form to: Give the landlord a box of chocolates or a bunch of roses. In that case it is clear that you have a choice of giving chocolates or roses. The same goes for £45.00 or a higher fee. You are the beneficiary of faulty drafting! ( I am assuming that the words you quoted are taken from the lease.)

[sid1956]

This is the whole clause:
Within one month after the date of every transfer, death, grant of probate or administration, assent transfer mortgage charge, sublease or other event or document relating to the Property to give notice thereof in writing to the Landlord and in the case of a document produce a copy of it to the Landlord or their managing agents or solicitors for registration and to pay a fee of forty-five pounds (£45.00) (or such higher sum as may from time to time be reasonably stipulated by the Landlord) plus Value Added Tax at the appropriate rate for each such registration of a document.

You are right, it's a fee for registration. I appreciate the point you make and the literal interpretation is correct. Might a Tribunal not say that the real meaning is obvious - that the Landlord is entitled to charge a higher amount - but only a reasonable one.

[Lawcruncher]

There is no saying what a tribunal might find. The thing is though that although we know what was intended, it is not what is said. A literal interpretation, though it produces an odd result does not produce a ridiculous one.

[sid1956]

So - can we have a second line of defense based on reasonableness of the fee. How would we approach that question?

[Gordon999]

You are the current lessee party to the lease and have a right to insist any charge in excess of £45 is outside the lease and not payable unless judged as reasonable and fair by the FTT. Ask the other side to make an application to the FTT.

[Lawcruncher]

So - can we have a second line of defense based on reasonableness of the fee. How would we approach that question?

The fee is expressed to be for registration. Registering an underlease takes no longer than it does to write down the details of the tenant, the term and rent - 5 minutes maximum. Even £45 is excessive. You can get 3 nights bed and breakfast for £230. Why have they incurred legal costs? What advice did they need that cost £800?

[sid1956]

Presumably £800 is solicitor's fee for writing a letter threatening forfeit of lease. They also want me to sign an underletting agreement - mostly indemnifying them for anything the tenant does. And they want to put a term limit on the permission (6 months) - whereas the lease says notification is required for any "new" contract. If a tenant stays after 6 months (holding over) then I don't think any new permission is required. Is that right? Thanks.

[sid1956]

They also want me to sign a 4 page Sublet Agreement adding new covenants. Do I have to sign this? - it doesn't say anything about a sublet agreement in the Lease - just that permission will not be unreasonably withheld.