Small HMO breaking covenants of lease agreement?

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    Small HMO breaking covenants of lease agreement?

    Hi everyone,

    I'm hoping you might be able to help me with an issue I've spent ages googling but haven't found much clarity yet.

    I'm trying to figure out if sub-letting a flat as a 3 person HMO would break the covenants of the lease.

    - Building is a semi converted into 2 flats.
    - Freehold is co-held by the 2 leaseholders of the flats.
    - One of the leaseholders has sub-let their flat to 3 house sharers. It's a bit of a revolving door - the actual tenants have been switched in and out a few times over the past year, and one has just changed again. There is no relationship between them other than the flat share (hence HMO), but I *think* all 3 names are on the same AST lease agreement, and they just update the name each time there's a change.

    My main question is, is this setup any kind of violation of the lease, given the wording of the following covenants:

    1) (Alienation) Not during the last Seven years of the said term to assign underlet or part with possession of the demised premises without the consent in writing of the Lessors first being obtained such consent not to be unreasonably withheld and not at any time during the said term to assign underlet or part with possession or any part of the demised premises as opposed to the whole itself
    2) Not at any time during the said term to use or occupy the demised premises or any part thereof for any purpose other than as a private dwellinghouse
    3) Not to do or permit to be done any act or thing which may render void or voidable the policy or policies of insurance of the demised premises and the said property effected by the Lessors [this is a separate point but the co-freeholder manages the insurance and I have reason to believe the HMO (or even the flat's sub-let status) has not been declared to insurers]

    Questions I have are:

    - Could the HMO status mean the flat has been sublet only 'in part' and not as a whole? e.g. sub letting bedrooms to different parties
    - What constitutes a 'private dwellingplace'? Does the HMO contravene this?
    - It sounds like no approval is needed from the freeholder to sub-let the flat unless within 7 years of the lease, is that right? In the solicitor's report on title it said Landlord consent was required to sublet (at any time) but reading the above, I think that's a mistake
    - Would any extra consents from the landlord be needed to sub let the flat as an HMO?

    I'd really appreciate your interpretation and any advice you can offer. There's more to the situation but I'm just trying to get clarity on a few points in isolation.

    #2
    Subletting to three different parties who are not related means the flat is a HMO even if they have their own lockable bedrooms.
    A private dwelling place is somewhere that only the people with the keys and agreement can live. A HMO is a private dwelling place.
    It is usual for permission to be needed to sublet. This is because a HMO requires additional safety items such as fire doors, and might need licensing.
    Yes, lots of extras would be needed to sublet as a HMO - it needs to comply with HMO requirements, have HMO insurance and the council will want to inspect it. The landlord must be a suitable person.

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      #3
      From what the OP has said it doesn't look like any consents are required from landlord but it may contravene 3 so insurers MUST be told. They may be contravening their mortgage terms too.
      There may also be a coverall lease clause not to do anything to cause annoyance to the neighbours, but that might be hard to pursue....

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