How Do I Challenge an Unreasonable Registration Fee (Not an Administration Charge)?

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    How Do I Challenge an Unreasonable Registration Fee (Not an Administration Charge)?

    Hi, I am leaseholder of a flat that I have recently sublet. There is no requirement under the Lease for me to obtain consent to do this. However, the Lease (dating from 1996) does oblige me:

    “Upon every underletting of the demised premises… within one month thereafter to give to the Landlord… notice in writing of such underletting… with full particulars thereof… and to pay to the Landlord a reasonable fee for the registration of the said notice (not being less than £20) plus any VAT…”

    The Landlord thinks that £120 including VAT is a reasonable fee for registering my notice. I strongly disagree.

    I would like to challenge the reasonableness of the fee but, as I understand it, the FTT will have no jurisdiction as the registration fee does not fall within the definition of an ‘administration charge’ under Schedule 11 of the Commonhold and Leasehold Reform Act 2002.

    Can anyone tell me how / where I can legally challenge the reasonableness of the fee? I do not want to wait for the freeholder to sue me for any balance that I refuse to pay, as we would then also be arguing over the myriad additional fees (which may be ‘administration charges’!) that he would no doubt add on in the meantime – I would like to be the one taking action first. Thank you!

    #2
    here is my suggestion :

    I believe the term "underletting" mean "letting below market rate".

    If you are subletting under AST agreement for one year or less at market rate, you are not "underletting" and do not require to comply to pay for registration under the lease.

    You can demand the freeholder to show you a court order requiring you to pay £21 pounds for registration.

    Comment


      #3
      Gordon, thank you for your suggestions. I am not sure that I would be happy arguing on the basis of your definition of 'underletting', I read it as being synonymous with 'subletting'. I fear that if the freeholder attempts to obtain a court order, that puts me on the back foot, which is the scenario I am seeking (but may not be able) to avoid. Thanks again.

      Comment


        #4
        Another suggestion is you offer to pay £40 +VAT maximum for registration fee of underletting.

        ( you can argue the £20 fee for registration in 1996 corresponds to RPI index 152 ( in 1996) rising to about 300 (in 2021 ).

        Comment


          #5
          Originally posted by Gordon999 View Post
          I believe the term "underletting" mean "letting below market rate".
          No. "underletting" is just another term for sub-letting a lease.
          Anyone with a long term lease who leases their property to someone else under a shorter term lease is subletting.

          Joe Forit:
          I'd say that you are correct that Schedule 11 of the Commonhold and Leasehold Reform Act 2002 doesn't seem to specifically include notification of a sublet - but it might be worth looking at previous tribunal decisions to see whether this has been included. I would say that it should be considered to be an administration charge, but it might require case law to determine that.

          Comment


            #6
            Originally posted by Gordon999 View Post
            I believe the term "underletting" mean "letting below market rate".
            Nice try, but "underletting" is the same thing as "subletting".

            Comment


              #7
              It is not for your to show that £120 is unreasonable, but for the landlord to show it is reasonable. £120 is manifestly unreasonable. Consider what the fee is expressed to be for: registration of the notice. That cannot take more than five minutes.

              Just send the notice with a cheque for £20 plus VAT. If they purport to reject the notice come back letting us know what they say and I will draft a suitable reply.

              Comment


                #8
                As far as I can see, the FTT does have the jurisdiction to consider the reasonableness of a variable administration charge such as this. See Schedule 11 CLRA 2002 and lease advice https://www.lease-advice.org/faq/wha...ration-charge/

                Comment


                  #9
                  Originally posted by Gordon999 View Post
                  Another suggestion is you offer to pay £40 +VAT maximum for registration fee of underletting.

                  ( you can argue the £20 fee for registration in 1996 corresponds to RPI index 152 ( in 1996) rising to about 300 (in 2021 ).
                  Thank you, I think my response to the freeholder will be in that general direction. Unfortunately the freeholder is a large and well known organisation not renowned for being reasonable, so that is unlikely to be the end of the matter!

                  Comment


                    #10
                    Originally posted by Macromia View Post

                    I'd say that you are correct that Schedule 11 of the Commonhold and Leasehold Reform Act 2002 doesn't seem to specifically include notification of a sublet - but it might be worth looking at previous tribunal decisions to see whether this has been included. I would say that it should be considered to be an administration charge, but it might require case law to determine that.
                    Thank you, I agree that it should be considered an administration charge, but I may have to write to my MP to pursue that one! There are certainly cases where the FTT has considered and commented on registration fees, but when the Upper Tribunal gets involved it becomes clear that, unfortunately, they do not fall within Schedule 11 definition. For example, Proxima v McGhee [2014] at Paragraphs 21 - 22.

                    Comment


                      #11
                      Originally posted by Lawcruncher View Post
                      It is not for your to show that £120 is unreasonable, but for the landlord to show it is reasonable. £120 is manifestly unreasonable. Consider what the fee is expressed to be for: registration of the notice. That cannot take more than five minutes.

                      Just send the notice with a cheque for £20 plus VAT. If they purport to reject the notice come back letting us know what they say and I will draft a suitable reply.
                      Thank you Lawcruncher, that is most helpful!

                      Comment


                        #12
                        Originally posted by eagle2 View Post
                        As far as I can see, the FTT does have the jurisdiction to consider the reasonableness of a variable administration charge such as this. See Schedule 11 CLRA 2002 and lease advice https://www.lease-advice.org/faq/wha...ration-charge/
                        Thank you eagle2. I believe the registration fee in my case is variable, but does not meet the definition of 'administration charge' in Paragraph 1 (1) of Schedule 11. It does not involve any grant of or application for approval, nor does it involve the provision of any information or documents to me. The Proxima v McGhee case that I mention above seems to confirm this.

                        Comment


                          #13
                          I agree that in Proxima v McGhee the FTT decided that it did not have the jurisdiction to consider the registration fee. Unfortunately it was not subject to the appeal, so it is not a precedent. Did the landlord send you a summary of tenants rights and obligations when it made the charge? If so, the landlord appears to have accepted that it is an administration charge and you do have the right to apply to the FTT.

                          Comment


                            #14
                            Originally posted by Joe Forit View Post
                            Unfortunately the freeholder is a large and well known organisation not renowned for being reasonable, so that is unlikely to be the end of the matter!
                            One of the reasons they are unreasonable is because people roll over too easily. Send £20.

                            Comment


                              #15
                              Thank you eagle2. While the Proxima decision may not be a precedent, the problem I have is that I believe it to be correct! I read my lease and I read the Act, and I completely agree with the decision. I do not really want to start arguing that black is white, even though that would suit my interests. I think my way forward there would be to convince a court that Parliament actually meant something different to what it put in the Act, but I am way out of my depth by this point and that is not a route I am seeking to go down.

                              It is quite possible that the landlord does think he is levying an administration charge - he seems to have even less understanding of the law than I do - but I do not think that makes it so. The landlord will send me a STRO for admin charges (I haven't sent my notice to him yet in this instance, I am first trying to work out where this will end up, but I know how he operates from previous encounters), but he will also send me a STRO for service charges, which nobody will believe to be relevant, as well as requesting lots of information that is not relevant to my tenancy. He basically just stuffs everything in an envelope and hopes to blind recipients with science. I am sure you are right in that the actions he takes will provide me with points that I can use to my advantage. Thanks again for your response, your time is much appreciated.

                              Comment

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