Long-leaseholder of flat faces unwarranted fee demands

[hypotheticalmonkey]

received this is in the post today (4 lots):

>>>>>>>>>>>>>>>>>>
"Subletting of XXXXXXX

We write with reference to our recent correspondence advising that XXXX is now responsible for collection of your ground rent and/or insurance premiums. Another of our responsibilities is to ensure all Leaseholders adhere to the terms of their Lease throughout its term.

We have notice that you have an alternative correspondence addresses logged on our system.

In the majority of leases there is a restriction which prevents Leaseholders from renting their properties without first obtaining consent from the Freeholder.

If you are subletting we require the following:
- a copy of the tenancy agreement
- notification if the property is let Asylum Seekers, DSS or students (to comply with insurance requirements)
- emergency contact details for yourself and the tenant (address and telephone numbers)
- a fee of £117.50 in accordance with the terms of your Lease and Section 19(1) of the Landlord and Tenant Act 1927 to cover our administrative costs in dealing with this matter.

Please supply within 14 days. Upon receipt we will issue our clients formal "License to Sublet".

If you fail to respond within the timeframe provided we will assume you are subletting the property and will deal with the Lease requirements accordingly. This will incur a higher cost for dealing with the administration of a breach of Lease.

If you are not subletting please confirm the current residential status of the property in writing or email to the contact details below and we shall note your account."
>>>>>>>>>>>>>>>>>>>>>>>

Questions:
1. in contrast to their claim, I received no notification that they were now responsible for my lease rather than the previous (current?) company (for 4 properties i.e. 4 missing letters??)
2. suspicious of "..in the majority of leases.." claim.. surely they have my exact lease and so know the specific clause?
3. ..which doesn't appear to have any explicit prohibition of renting the property out.. or any mention of procedure if i do sublet
4. where does the £117.50 figure come from?

would appreciate some advice here! should I pay up or fight it?

thanks in advance

[Subway]

4. where does the £117.50 figure come from?

Sorry I can only guess one £117.50 = £100 + VAT.

Seems like a plucked out of thin air figure and not likely to easily relate to reasonable charges. If its not in your lease then I can't see they can charge it even if a charge can be made under this act.


Have you determined whether this company have taken over?

[hypotheticalmonkey]

will be checking that tomorrow

cant find ANY mention of this in the comprehensive lease. Perhaps I should ask them to clarify which term states I have to do this?

[ram]

If you are subletting we require the following:
- a copy of the tenancy agreement etc. etc. etc
4. where does the £117.50 figure come from

where does the £117.50 figure come from...... Well, you --did-- ask.

If you have ever been in the position of a lets say, Large Victorian house, of 5 self contained flats, each owner is Director of in house Managing company where any potential new owners have to be accepted via "No objection" to new owner, then to have an owner sub let, where no one knows who is about to rent, don't know how many people will rent, their names or even what sex they are, how long they are going to stay, and who are these strangers with keys to the common parts that have just descended on the place .......

The letting agent treat the managing company as pieces of dirt ......

Then the "on site" Company Secretary going through the whole process telling every new tenant, of their parking spaces, telling them their tenacy is wrong cos the clause to keep the gardens in good order, hedges trimmed and plants seen to, is bollocks, because we have a gardener, telling them they do not have 3 parking spaces for their visitors, telling them the bin collection dates and times, and giving them copies of the council lists of what they can and can not put in the bins, cos the owners don't live here and have --never-- been aware of the new collection dates, having to check what mess to the outside grounds have been left in as the letting agents are not concerned if there are any unresolved issues with other flat owners, as all the letting agents do is check the interior of the flat on the day the tenants move, giving more work to the Company Secretary to find out when the tenants are leaving ( the letting agents refuse to advise )


Takes breath ........

Company Secretary ( not the flat owner and not the letting agent ) has to advise the letting agent of problems ( fag ends all over the place, outside, for example, in breach of lease to keep grounds tidy [ head lease ].. checking that items have not been left in the basement by leaving tenants, cos C.S. has to keep eye on what goes in and out, and by whom.

Tenants don't get their mail redirected, and next tenants just leave them in letter box, and C.S. has to redirect them. Fighting off debt collectors of previous tenants. New tenants getting worried about all the debt letters to their new tenanted flat, knocking on our door to ask what to do.

Takes breath ........

The letting agents have no forwarding address for outgoing tenants.
The C.S. out of company funds has to redirect this unwanted mail, the owners live hundreds of miles away.
The owners renting the flats think the letting agents see every thing that goes on, and we all know they know letting agents know very little about the managing company that manages the property, and what goes on at the property.

And you wonder why a £ 100 fee is asked for !! when owners and Letting agents refuse to speak to Lessor. ( the firm asking you for the £75 / £117.50 that does all the work above that the letting agents ALWAYS refuse to do, and absent owners thinking letting agents are concerned about the other residents )

.

moan over ........

[animal]

The C.S. out of company funds has to redirect this unwanted mail, the owners live hundreds of miles away.

Try 'return to sender - no longer at this address' at no cost :-)

[ram]

Try 'return to sender - no longer at this address' at no cost :-)

Err, no,
How many letters do you think the debt agencies get from tenants, who still live at the same address, but just put "no longer at this address" ? just to get out of paying debt. The debt companies are wise to that, and VISIT the premises, vist the new tenants about the old tenants debt.

The letters keep coming, and coming, tenants sometimes call here and say - we have never heard of these people ( Letting agent WONT tell new tennants the names of the previous tenants [ Data protection act ] ) so new tenants wont know the letters are for the old tenants, and forward them to letting agents ( cos letting agents keep this information from new tenants.)

The C.S. has to do this, no one else will, for the vast amounts of money they get from the rent or agency fees !! -- We tell them the previous names so they can redirect back to letting agent. ( Unpaid mobile phone bills, home phone, etc, etc, etc. )

Nor will letting agents tell new tenants to forward any old mail to letting agents, ( at no cost ).

Debt agencies pursue previous tenants, but the adddress is then blacklisted for unpaid debts, which then stops the new tenants from from possibly getting credit ( Not very good of the letting agent or owner, to ensure a peacefull life for tenants -- is it ? )

So the owner is MADE aware of what previous tenants were like, and the failings of his / her letting agents, by sending him / her the correspondance intended for his / her previous tenants, and to ensure he/ she will advise the debt collectors or normal mail that tenants no longer live there, and to give them their forwarding address.

Why should the C.S. do the jobs mentioned , ( Post 5 + 7 ) unpaid, when the owner gets up to £ 1000 per month, and agents up to £ 100 an month, and the G.S. has to do all post 5, and post 7 for them ? without even a thank you.

Absent Owners, I can assure you, are not aware of what goes on. How can they, they don't live here, and Agents are only concerned with the one flat with current tenant, not other residents there, and not previous tenants no longer living there, as the tenancy agreement has ceased..

That's why the Managing company ask for the money, and copy of lease / phone numbers, as letting agents ---refuse-- to talk to the ( on site ) managing company, and owners say "I'm paying the letting agent's, so go talk to them" so stalemate ....That's why it's put in the headlease.

R-a-M

[Lawcruncher]

What the managing agents can demand depends on what the lease says (a) as to underletting and (b) as to insurance.

[hypotheticalmonkey]

"If you have ever been in the position of a lets say, Large Victorian house, of 5 self contained flats"

i haven't but can appreciate where you're coming from

I pay my ground rent and service charge to cover all of the other scenarios/experiences mentioned (more than £1000/yr per flat)

this additional £117.50 seems to be like a complete rip-off

[ram]

I pay my ground rent and service charge to cover all of the other scenarios/experiences mentioned (more than £1000/yr per flat)this additional £117.50 seems to be like a complete rip-off

Well, you can't include it in the service charge for those that don't rent out their flats.

But the service charge is not for doing what the letting agents don't do. ( Yes - we pay 900 / £ 1000 pa service charge each ) It's to cover services for the property and owners, and not if you rent out your flat, not to advise / mother the new tenants every 3 to 6 months, who are being looked after ( allegedly) by a letting agent. You are paying the letting agents for the extra work it takes to look after your flat in your absence, so if letting agents don't do it, the managing co. has to do extra work in your absence !!

I can assure you, that all items quoted in post 5 + 7, the letting agents should do, but do not, so why should the managing company do it for them ? Your agents get , say, 10% of rent but managing agent asks only for 1%.... p.a. or per tenant change. Cheap at the price.

Remember that Letting agents Refuse to talk to a managing company, as their contract is with you, and not the managing company. So in order to know who these strangers are, changing on a regular basis, the headlease makes provision for this fact.

I can understand your resentment in a mere £ 100 if you sub-let, but as posts 5 + 7 show, it's additional hard work for the managing company, it reflects on the buildings insurance, etc, etc etc.... see posts 5 + 7

R-a-M

[hypotheticalmonkey]

i can completely understand where you are coming from, but without wanting to write quite as much my situation is very different. A block of 6 purpose build (new build) apartments with a common entrance/stairwell. I also manage them (my tenants) myself and take pride in 1. getting good tenants 2. taking care of the small details e.g. mail redirection (which I charge/deduct for) 3. making sure insurance etc is valid (see previous posts) 4. regular visits

this demand appears to be for some very basic information, and I cannot see how the figure of £117.50 can be justified per flat. It appears to be a one-off fee, and there is no suggestion of any ongoing service/commitment such as the examples you mentioned i.e. info will be filed and 'forgotten' about. It appears to simply be a moneymaking exercise!

[ram]

It appears to be a one-off fee, and there is no suggestion of any ongoing service/commitment such as the examples you mentioned i.e. info will be filed and 'forgotten' about. It appears to simply be a moneymaking exercise!

You could well be right. And in your case you have every right to object, but if the lease says there is an additonal registration / administration fee, for only those that rent out their flats, and not applicable to owners that live there, then you may have no option but to pay.

Yes, in your situation, the fee may be "forgotten about".

In our case, the company secretary of the Managing company is unpaid, receives no fees for the general administration, and tenants ( rented from owner ) does cause additional expense, as shown.

R-a-M

[hypotheticalmonkey]

currently looking at another thread where Jeffrey answers that:

"Yes. Refer to s.19(1) of LTA 1927. The covenant is deemed to permit- as condition of consent- only "a reasonable sum in respect of any legal or other expenses incurred in connection with such...consent"

Better still is s.19(2). This applies IF your lease:
a. was granted for > 40 yrs;
b. has > 7 yrs. unexpired; and
c. was granted explicitly "in consideration...of the erection, or substantial improvement..., of buildings", and L is not a local/public authority.
If all these three rules are satisfied, the Act overrides thge covenant and states expressly that "no consent or licence shall be required, if notice in writing of the transaction is given to [L] within six months" So L cannot then demand any consent procedure AT ALL, no matter what the lease says. Result!"

so this may be a get-out clause. However amendments have been made to this act, so waiting for further clarification.

[ram]

"a reasonable sum in respect of any legal or other expenses incurred in connection with such...consent"

£ 100 only represents 2 to 3 hours work, for managing company / agent, so that could be a "reasonable" sum. You pay a solicitor here £ 180 an hour just to talk to you !!!!

The problem is that ( sorry to repeat ) Letting agents refuse to talk to managing company ( Trust me, they ignor letters and emails ) so you may find clauses being added to leases, or Management resolutions being passed, to include all that I memtiond in 5 + 7, stating that if additional work is having to be done, as letting agents dont deem those to be their responsibility, then an individual charge to the owner for those extra services may be invoiced for those services of the Managing company / agent.

I recently had to charge an owner for ---- whatever --- because the letting agent could not answer a simple question when tenants left, which entailed £ 350 invoice to owner for replacing certain security items, as a direct result of the failure of letting agent to do their job.

It is not fair that live in owners should pay for tenants failures or letting agent failures, and I had support from other owners on this.

R-a-M

[animal]

The problem is that ( sorry to repeat ) Letting agents refuse to talk to managing company ( Trust me, they ignor letters and emails ) so you may find clauses being added to leases, or Management resolutions being passed, to include all that I memtiond in 5 + 7, stating that if additional work is having to be done, as letting agents dont deem those to be their responsibility, then an individual charge to the owner for those extra services may be invoiced for those services of the Managing company / agent.

Not arguing for or against extra charges, Ram, but as you seem to be a company secretary of a ROMC you should be aware of the comments in p6.1
of CAM/00MC/LIS/2005/0009

The Management Company has no power unilaterally to alter the lease in respect of the charges for gas or water supplied to the premises, nor does the lease provide that changes to the terms may be made by resolution of a majority of lessees at a general meeting..

The OP did say that he had asked which clause in the lease allowed the charge and could not find one him/herself.

[Richard Webster]

Better still is s.19(2). This applies IF your lease:
a. was granted for > 40 yrs;
b. has > 7 yrs. unexpired; and
c. was granted explicitly "in consideration...of the erection, or substantial improvement..., of buildings", and L is not a local/public authority.
If all these three rules are satisfied, the Act overrides thge covenant and states expressly that "no consent or licence shall be required, if notice in writing of the transaction is given to [L] within six months" So L cannot then demand any consent procedure AT ALL, no matter what the lease says. Result!"

This doesn't work to prevent the requirement for a licence in the case of most flats as they were not leased "in consideration...of the erection...of buildings...". That would only be the case if the lease was granted to a lessee by a landowner and the lease provided that the lessee should put up a building.

This is obviously not the case with most flat developments/improvements but generally is the case with long leases of houses built c. 1900.. Here it was common for a landowner to grant a lease to a builder of so many plots of land (typically 2-6 at a time) and the builder would agree to build the houses and pay some small ground rent of £2-£4 per year per plot. The houses were then rented out by the builder/lessee on short term tenancies and at some point from the 1950s onwards aws the tenants died or moved out, the lessee (or his children or grandchildren) would have got bored and sold off the houses. At that point only part of the land comprised in the lease would have been sold and a licence to assign would not have been required because of the 1927 Act.