Underletting clause and "informal arrangements"

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    Underletting clause and "informal arrangements"

    I have engaged solicitors on this but they have been somewhat lackluster so I am seeking opinion.

    Leaseholders have built on property not demised to them (I am the freeholder). I am currently requiring them to take down the offending structure to avoid action for breach of covenant and forfeiture of the lease. It turns out that the property is not occupied by the owner and I had no physical address for them. I pointed out to the solicitors that the lease requires notice of underletting / assignments etc.. and so as part of the settlement my solicitors required that they serve notice of underletting and pay a £90 fee.

    They have so far cooperated on several other things but their solicitors have refused to give notification or pay the fee on the basis that the occupation by others is an "informal arrangement" and so not notifiable. My solicitor has accepted this on face value. The actual clause reads:

    7.23 within 28 days of every transfer, underletting, assignment other form of disposal, mortgage or legal charge of this Lease and of every transfer, assignment and underlease and also of every Grant of Probate or Letters of Administration, Order of Court or other instrument effecting or evidencing a devolution of the title of this Lease, to provide the Landlord and the Management Company with notice thereof for the purpose of registration and to pay to the Landlord a proper and reasonable registration fee being not less than £65 (together with any Value Added Tax which may be payable in respect of it) for each notice.

    Notwithstanding that the leaseholder admitted to me in an email that he does not live at the property and that it is let out; as a landlord I am aware that most "informal arrangements" produce some kind of a tenancy or at very least a licence. Is my solicitor right to accept the "informal arrangement" so not notifiable line? I have come up against this question before so would quite like to understand it better.


    (The leaseholder is contractually liable for all legal costs associated with remedying breaches.)
    Assume I know nothing.

    #2
    You are the freeholder, the leaseholder of the flat HAS to abide by the lease.

    Assuming the flat is sub-let ( let, and rent being paid )
    Either the sub-tenants are paying rent to an agent or the landlord of the flat. If to the agents, the agent has the flat owners address.

    Send 3 letters ( letters, not emails, and NOT recorded delivery ) to the residents, and the landlord of the flat to the flat address, and the agent if you can find out from the tenants who the agents are, stating,

    There are breaches of the head lease, and unless these are rectified, you will initiate forfeture proceedings after an initial tribunal hearing, and when successful, the ocupants and flat owner will be evicted, and no money will be paid to the owner on loss of the flat.

    Furthermore, if the flat gets forfeited, the mortgage company will insist on FULL repayment of the mortgage loan, as they will no longer have an asset to call upon if defaults on the mortgage payment cease.
    This means - no money for flat lost, and no flat to sell to pay off the mortgage company. and all ocupants become homeless.

    If you realy want the possibility of losing everything, then don't rectify the breaches of the lease.

    That's what I would say, and without contacting a solicitor...........

    Comment


      #3
      £65 is way over the top for registration so anything exceeding it is unreasonable.

      Almost by definition a tenancy cannot be said to be informal. A licence is not covered by the clause.

      What is the offending structure? When was it built? Please quote the alterations clause.

      Comment


        #4
        The structure is a wall, built this year on land not demised to the leaseholder and enclosing land part of which they have a defined right of access to and part of which they are expressly prohibited from. It was brought to my attention when I was served with an enforcement notice by the planning authority. There is no argument from the leaseholders that this is was not a breach of both the lease and planning.

        The occupancy is a separate matter being tied up at the same time, along with ground rent arrears and other matters.

        I agree that almost by definition a tenancy cannot be informal. It is whether an informal arrangement gives rise to a requirement to notify under the clause above (within 28 days of every transfer, underletting, assignment, other form of disposal, mortgage or legal charge of this Lease).

        Assume I know nothing.

        Comment


          #5
          Originally posted by ram View Post
          You are the freeholder, the leaseholder of the flat HAS to abide by the lease.

          Assuming the flat is sub-let ( let, and rent being paid )
          Either the sub-tenants are paying rent to an agent or the landlord of the flat. If to the agents, the agent has the flat owners address.

          Send 3 letters ( letters, not emails, and NOT recorded delivery ) to the residents, and the landlord of the flat to the flat address, and the agent if you can find out from the tenants who the agents are, stating,

          There are breaches of the head lease, and unless these are rectified, you will initiate forfeture proceedings after an initial tribunal hearing, and when successful, the ocupants and flat owner will be evicted, and no money will be paid to the owner on loss of the flat.

          Furthermore, if the flat gets forfeited, the mortgage company will insist on FULL repayment of the mortgage loan, as they will no longer have an asset to call upon if defaults on the mortgage payment cease.
          This means - no money for flat lost, and no flat to sell to pay off the mortgage company. and all ocupants become homeless.

          If you realy want the possibility of losing everything, then don't rectify the breaches of the lease.

          That's what I would say, and without contacting a solicitor...........
          Thanks. Action against the encroachment has been taken. I am glad that I appointed solicitors as I might well have made process errors which would have prevented me from threatening forfeiture. My costs have so far been covered by the leaseholder.
          Assume I know nothing.

          Comment


            #6
            Originally posted by Hooper View Post
            I agree that almost by definition a tenancy cannot be informal. It is whether an informal arrangement gives rise to a requirement to notify under the clause above (within 28 days of every transfer, underletting, assignment, other form of disposal, mortgage or legal charge of this Lease).
            An "informal arrangement" is "none of the above". A licence is not a disposal.

            Comment


              #7
              I'd imagine the key would be whether or not whoever is in occupation pays rent and lives there.
              If they do, it sounds like a tenancy, and, if they don't, it probably isn't.
              When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
              Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

              Comment


                #8
                Originally posted by Lawcruncher View Post

                An "informal arrangement" is "none of the above". A licence is not a disposal.
                But if an informal arrangement gives rise to a tenancy ... that would amount to an underletting?
                Assume I know nothing.

                Comment


                  #9
                  Originally posted by jpkeates View Post
                  I'd imagine the key would be whether or not whoever is in occupation pays rent and lives there.
                  If they do, it sounds like a tenancy, and, if they don't, it probably isn't.
                  I am aware someone else lives there and that the owner does not. Unfortunately I have no idea what the rent arrangements are. The owner confirmed in writing that it is "let". But their solicitor appears to have back tracked from that.

                  To be honest it is a small issue which I would not have pursued had I not needed to the owners details to deal with the larger matters. I just dislike loose ends!
                  Assume I know nothing.

                  Comment


                    #10
                    Wonder if they are declaring ALL rent to HMRC. And that any mortgage or insurance covers the place (probably not insurance, what if it catches fire, place burns down, damage to nearby buildings, occupants and their visiting grandchildren 'orribly burned... ).

                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      Originally posted by Hooper View Post
                      But if an informal arrangement gives rise to a tenancy ... that would amount to an underletting?
                      There are some arrangements which are difficult to analyse. The line I would take is: If I get full details what am I going to do with them? What will I do which I have not done before? Do I really need to know who is living in the property and what the arrangement is?

                      Comment


                        #12
                        Originally posted by Lawcruncher View Post

                        There are some arrangements which are difficult to analyse. The line I would take is: If I get full details what am I going to do with them? What will I do which I have not done before? Do I really need to know who is living in the property and what the arrangement is?
                        Yes - I can't really disagree with that.
                        Assume I know nothing.

                        Comment

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