Changing Lease Clause to Permit Letting

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    Changing Lease Clause to Permit Letting

    Not sure if this is the best section to post in, so please move if it is considered best place elsewhere.

    I have had ownership of a flat, one of just four in a converted house, for many years. There is a simple flat management structure; the four owners are directors and have one share each. The flat management company is also the freeholder of the whole property.
    Since the house conversion in the 1970s, all the flats have been owner-occupied. Now one of the properties is being sold and the seller wants it to be available for buy-to-let purchasers.
    This would be a major change; however the leases do not allow for letting.

    A couple of the other owners are very uneasy about having a buy-to-let arrangement, primarily due to concern about what kind of people are likely to turn up as tenants. This isn't snobbery but sincere concern for personal safety; I'm afraid we are living in particularly difficult times.
    As it is, the management company has not voted with a majority in favour of allowing the lease to be changed.

    The seller is finding that no-one will (apparently) buy the flat because of the restriction on letting. Is this likely to be the case? At the same time, other residents remain highly concerned about giving way.

    Reading other threads here, there seems to be an opinion that NOT permitting letting will devalue properties. I do wonder whether this is merely a view of staunch buy-to-let supporters, or whether there is some genuine truth in it.

    IF...If we were to agree to let the seller change the appropriate clause in the lease, would we as a management company have any say in the future over what category of renters would be acceptable, or would it be forced to accept all and any kinds due to discrimination, equality laws etc etc etc?
    Professional lets are normally not an issue, however we do know that at the first sign of students, benefits claimants etc, our property insurance premiums will rise......and this obviously affects the other residents in the block.
    Bad tenants adversely affect property values, surely?

    Is there any way we as a flat management company could be forced to make these changes?




    #2
    I can only give my opinion based on what i see when dealing with ASB and general bad behaviour with tenants as part of my job, even as a landlord, if i were in your position with the arrangement as it is.... i would not want the flat to be allowed to be a BTL, Yes it may limit the number of buyers but for the owner/occupiers who still live in the other flats it will be a lot nicer living there. The current owners are right to be worried about who may be tenants, the management company will have no control over who they are, gone are the days where a clause can be put in to stop those claiming benefits to rent the place...... forget that one straight away. If they open Pandora's box then all control is lost. I would not do it.

    Comment


      #3
      Thank you for your thoughts on this. I'll appreciate others' input as well. Incidentally I'm not the seller in this issue.

      Comment


        #4
        Originally posted by witsend55 View Post
        Incidentally I'm not the seller in this issue.
        Even if you were my opinion would stay the same, i think that given it is a converted house the noise isolation and other issues are not the same as separate purpose built flats, so having one as a rental will have far more of an impact upon the other owners who live there. It really is a one way street if the permission is given, and remember this, it may reduce the number of buyers for the flat in question but in the future it may also reduce the number of buyers for the other 3 remaining flats..... i would not wish to buy a converted flat with any of the others as rental properties due to the reasons i have stated, it cuts both ways.


        Comment


          #5
          You can really only change the leases with 100% agreement of everyone. Nor should you change this lease.

          It's is not a majority vote.

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            #6
            Earlier posters have covered everything I wanted to write.

            Owner occupiers generally treat a property better than tenants (I have been both and it applied to me too).

            Comment


              #7
              Originally posted by witsend55 View Post


              1) Reading other threads here, there seems to be an opinion that NOT permitting letting will devalue properties.
              2) Bad tenants adversely affect property values, surely?
              3) Is there any way we as a flat management company could be forced to make these changes?
              • 1) Your possition - and mine, is NOT permitting letting will enhance the properties.
              • 2) Bad tenants DO adversely affect property values - normally.
              • 3) Your lease is not defective, so no need to change. And Judges HAVE gone along with the freeholder keeping the "no letting" term.
              • 4) Your argument is also as all above posts, and additionally, it is a residential building, with owner occupiers, and not for a business opportunity to make profit from, and you all want it to stay that way. AND there was a reason initially for not agreeing lettings.

              I have seen developers come onto properties. They don't give a dam about your access or parkng rights. They let it for 3 years to pay for the "up grading", ( £ 20,000, so they don't lose if they have to sell at the same price ) then sell at a profit, and countless problems with the owners that let out not giving a dam either.

              I had an occation once where the new leaseholders did not ask permision to sub-let, and when I found out, and because they too could not give a dam about anything, ( many probIems in their short time there ) decided that any problems with sub-tenants, would not be resolved by the owners, and in my mind, would not be suttable for us to allow them to sub let.

              After telling them they must ask for permission,and receiving such a request, I refused permission, without any reasons. ( I took a calculated risk )
              The owners, the letting agents who were about to put in 2 sub-tenants ( without permission ), and possibly a soilicitor somewhere, did not contest my decision. AND it was not a 100 % agreement to allow the sub-lettng ( I voted no to sub-letting - of course )
              Shortly afterwards the flat was up for sale.

              Your insistance at number 4 should suffice, and add, The lease is not defective, and the "Company" must enforce the lease - by Law, and the no letting covernant will remain in all leases.





              Comment


                #8
                Thank you everyone. The thoughts here are in accordance with my own gut feeling, that our flat management co. should leave things as they are. I have been very worried where it all might lead to if we got psychologically bulldozed by the seller into agreeing to such a major change in the residency structure. I must say that over thirty years each flat has only changed hands once; it's been pretty quiet! Your responses have been most helpful.

                Comment


                  #9
                  Originally posted by witsend55 View Post
                  our flat management co. should leave things as they are.
                  The Directors must inform the Managing agents that "they must adhere to the lease, and that the management company has not voted with a majority in favour of allowing the lease to be changed, therefore please continue to enforce the lease" as the directors so stipulate.

                  Comment

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