Holiday Lets are breach of lease - Yes or No?

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    Holiday Lets are breach of lease - Yes or No?

    We are in the process of buying a property where the management company are the 5 owners (of which the property we are buying is 1 of the 5). We
    wrote to the Management company requesting the following consents

    1. To let as "holiday let" and we received the following response:-
    the Company cannot agree to "the property" being used as a holiday rental. Having sought advice we are of the opinion that this would be in breach of the lease;
    Breach of lease;
    4.8.1 not to use the Demised Premises other than as a private dwelling on single occupation nor to do or permit or suffer to be done in or upon the Property or any part thereof anything which may be or become a nuisance or annoyance or cause damage or inconvenience to the Lessor or the tenants of the Lessor or neighbouring owners or occupiers or whereby any insurance for the time being effected on the Property (including the Demised Premises) may be rendered void or voidable or whereby the rate of premium on such insurance may be increased.
    Having consulted XXXX Management’s insurance broker they have confirmed that using "the property" as a holiday letting would increase the insurance premium."

    OUR THOUGHTS: We would be prepared to pay a reasonable additional cost of insurance.
    The property is a small one bedroom property on the canal side, we were under the impression that holiday lets to a couple in these circumstances would still constitute using it as a private dwelling.

    On another clause they said "4.9.1 Not to assign underlet charge or part with the possession of part only of the Demised Premises as distinct from the whole and not to underlet or part with possession of the whole of the Demised Premises (other than by way of an assured short hold tenancy created by virtue of Part I of Chapter II of the Housing Act 1988 for a term of not less than 6 months) unless
    4.9.1.1 the prior consent of the company has been obtained and
    4.9.1.2 the Lessee and the Underlessee enter into covenants with the Lessor and the Company (mutatis mutandis) similar to those in the paragraph 4.9.1
    Having consulted the solicitor who drafted the lease between XXXX Management Ltd and the owner of each flat, it is felt that using "the property" as holiday lettings are in direct contradiction to the above clause and would therefore constitute breach of contract."

    OUR THOUGHTS: we were asking for prior consent as it requests us to do.
    As a holiday let we do not "part with possession" at all as per our terms and conditions we always maintain a right of access to the property and
    can enter the property at any time.

    2. on a second point we asked if we could replace the staircase in the property to allow the current small upstairs bedroom to be enlarged. We got the following response:-
    "4.11.1 Not to make any structural alterations to the Demised Premises and not to commit and not to commit any waste make any addition to the Demised Premises or unite the Demised Premises with any adjoining premises
    Changing the staircase is in direct contravention of this clause."
    OUR THOUGHTS: is it reasonable to stop us changing a private internal
    staircase? Is there anything we can do to persuade them?

    On a general note they stated "Personal Objections raised by the residents include;
    1) Concerns regarding the security of the garage and corridor areas. These areas are currently used by all shareholders of XXXX Management Ltd. as storage areas for personal effects and vehicles. This is only possible as all shareholders know and trust each other. The periodical use of the garage and other communal areas by persons unknown and unvested by XXX Management would prevent this.
    2) Parking in the garage and correct use of the garage door requires some experience and skill that those using "the property" as a holiday rental would not possess. Furthermore, due to the size of each of the car parking spaces there may be a risk of damage to the pillars and other shareholders cars.
    3) Refuse produced by those using "the property" as a holiday rental would rely on other shareholders of XXX Management to put out and deal with.

    OUR THOUGHTS: 1)In the lease it states "Not to bring keep store stack or lay out upon the common parts any materials equipment plant bins crates boxes or any receptacle for waste or any other item ......" so surely if
    no one stores anything in common areas there isnt a problem. Also at the point we purchase the property they have no idea who we are or whether they can trust us and as we could have quite legitimately lived there ourselves they would be no better off. 2) Surely they cannot cite that holiday guests would not possess the skill to use a "bleeper" or have the skill to park a car properly. 3) We would have a property manager visiting the property once or twice a week and we would be happy for her to go on "bin day" every 5th week to make sure we played our part.

    Can anyone give their thoughts on the above, please.

    #2
    Parr' added

    other than by way of an assured short hold tenancy is the key here.

    You cant do an A.S.T. for less than 6 months, so you are stuffed.

    As I am one on those persons who has to answer the questions you put
    to the management company, I would also ensure you do not buy to
    let out as a holday let.

    We had enough problems in the past ( hopfully no more ) that every 3
    months ( shared flats had 2 sub-tenants on 6 months, 3 months apart )
    Every three months, we had to tell the new sub-tenants not to block the
    garages, not to park here there and everywhere.
    Not to make noise, not to play music after 11pm, etc. etc.

    Tell them what they can and cannot put in the grey bins, green bins,
    blue bins, green boxes, blue bags, etc, when the collection dates are, and
    each flat takes turns to take out the bins, boxes, bags on the required day.
    Some are every 2 weeks, some are every week, and at 7:45 am

    So you want to impose changes of people at your proposed flat every week.
    Sometimes there will be 2 lots, one for a working week, and one for the weekend.

    Who is going to sort out their rubbish, that they put in the wrong bins, as they are
    rushing to catch a bus, train, plane. Whois going to remove the glass bottles out of
    wheelie bin and place them in the green box.

    Are you sending round the agent at 7:45 am when it's your turn to put the bin
    on the pavement, handles placing into the road, or the box of glass and tins.
    Are you prepared to pay the fines that the management will be given when your
    renters put ALL their rubbish in one bin, which contain items not allowed in
    that bin, box / bag.
    If there is a large communal bin ( 4 wheels ) is agent going to open every bin bag,
    / pedal binbag to ensure your visitors have not put stuff in the wrong bin.

    You and your visitors will be subject to observing the head lease, and if renters
    change every week, it's more of a possibility that you ( as the owner ) will most
    likely breach the lease on many ocations.

    And if you confront the holiday makes, they WILL tell us to
    " go forth and muliply", as we are not renting the flat to them.
    Been there seen it, and sued the owner for breach of lease.

    Hope you now understand, not on a legal matter ( apart from the A.S.T. ) that
    people have had enough of wiping the backsides of owners and renters and
    having to communicate constantly with sub-tenants, in a never ending cycle,
    and the frustration of having to rectify sub-tenants actions, none stop.

    I would not give permission to do what you wanted ,and would be prepared
    to go as far as court to put our case, as would the rest of the owners.

    R.a.M.

    Comment


      #3
      I would agree with most of what RaM has said. We have a leasehold flat which we let with the consent of the freeholder, but only allowed to do so on a residential tenancy. I can fully understand why others in the block and the freeholder themselves, do not want constant comings and going of new "tenants" every week/weekend/fortnight, nor the noise, hassle, parking issues etc that goes with the mentality of people who are on holiday to enjoy themselves regardless of the residents that live around the property.

      Besides, we looked into selling our flat last year and buying a property specifically to change to holiday use, and when we weighed up the additional costs, ie cleaning/servicing the property, additional insurance, PAT testing requirements, general wear and tear of furnishings (we currently let unfurnished), voids in let during low season (you really need to calculate income on a maximum 26 weeks a year guaranteed let), marketing costs; we found the residential 52 weeks a year letting income was only slightly less than we would get on a similar sized property for holidays.

      Comment


        #4
        I should forget buying this flat and look for another if you want to let it for holidays. Even if the position is not 100% clear you are going to have all sort of disputes and you do not want that.

        Comment


          #5
          A message for Ram

          Originally posted by ram View Post
          As I am one on those persons who has to answer the questions you put to the management company, I would also ensure you do not buy to let out as a holday let.
          We do not appreciate being threatened.

          We politely wrote and put our suggestions forward to the Management Company.

          You should not tar all landlords with the same brush - your experience is with the landlords and tenants of AST's. We offer Luxury holiday lets - this is an area you have no experience of, either in the standards we keep with our guests or how a luxury holiday let and its parking space are
          managed. Regarding the refuse collection - all refuse would be removed from the property by our agent, so in no way would impact on the other owners. We have a local property manager to look after the property .... if it were let as an AST you would have an absent landlord. Isnt it a better situation to have a luxury holiday let where a manager calls in once or twice a week?

          The alternative to our operating this property as a luxury holiday let
          (we let mainly to the retired or middle age range), would be that we rent it out under an AST (could be students / young people more likely to cause a disturbance) and you "may" get the same problems as above or we let someone else buy it and either the new owner or their tenant cause you parking and refuse collection problems.

          I know which option looks like less trouble to me .....

          Comment


            #6
            Wharton - no one was threatening you.

            If you are soooo sure what you are doing is right then why are you asking for comment on a residential landlord site. - Luxury holiday lets - you'll be telling us you know all your clients personally and can vouch for their behaviour next. LOL.



            Freedom at the point of zero............

            Comment


              #7
              Our reply was to RaM

              Comment


                #8
                Ram was not threatening you.



                Freedom at the point of zero............

                Comment


                  #9
                  We, the regular contributors to this forum, do not tar all LLs, nor Ts, with the same brush.
                  "your experience is with the landlords and tenants of AST's. We offer Luxury holiday lets - this is an area you have no experience of, either in the standards we keep with our guests...." and how do you KNOW that?
                  You are stuffed by the AST requirement and by 'no structural alterations' condition. You do not want to just replace the stairs but alter the size of a bedroom.
                  If you purchase the property you become 20% of the Management Co making the decisions. If 3 are against any of your proposals, you lose!
                  Lawcruncher offers could advice, the flat does not appear to fit your business model.

                  "I know which option looks like less trouble to me ...." so take it.

                  Comment


                    #10
                    A message FROM R.a.M.

                    Originally posted by wharton View Post
                    We do not appreciate being threatened.
                    or we let someone else buy it and either the new owner or their tenant
                    cause you parking and refuse collection problems.
                    Reply to wharton, but also for others reading these posts.

                    I am often chastised for my truthful and unconventional writings on here.
                    However, many is the time I have been thanked for going a route that
                    explains complications or hassles that will occur, or for things that are
                    not easily seen by those who, can only see the legal aspects, and forget
                    the human / moral / duty aspects.

                    I take no offence from writings on here, but welcome it, as I do have a
                    tendancy to "shout" sometimes.

                    Yes, you seem to have covered the good aspects of a holiday rental,
                    which is a credit to you, and Yes, I do have experience in quality holiday
                    lets, both giving and receiving, be it only for 12 months.

                    Your statement "or we let someone else buy it and either the new owner
                    or their tenant cause you parking and refuse collection problems."

                    In that case, if the lease is breached, the new owners will be asked to stop or
                    forefiture of flat will be instigated, or court action to obtain an injunction.
                    So that's no problem.

                    My "about me states"
                    Biography
                    Gives non legal advice (extreem cases). Puts different slant on the problem. ( it works )

                    So accept my writings as unconventional, but said in a way to bring home the
                    problems a certain way of renting a flat can bring to those that live on the premises,
                    and why sometimes the wellbeing of those already on the property outweigh
                    the disruption incoming owners will bring.

                    The needs of the many, should be considered over the needs of the one.
                    But the law is against the many, and the many have to make a stand, often to
                    the anoyance of prospective purchasers.

                    P.S.
                    I can and have argued the case
                    a) for tenants, for landlords, for freeholders, managing administrator.
                    b) against tenants, landlords, and freeholders, managing administrator.( agents )
                    as I am all 4, and see all sides of the story, so any perceived attack on anyone,
                    was not an attack,- I just had my Flat owners hat on.

                    No offence taken, Mr. Wharton.

                    R.a.M.
                    Last edited by ram; 03-08-2011, 17:39 PM. Reason: P.S. added

                    Comment


                      #11
                      I think the forum and its contributors are very helpful. However my response was specifically for RaM and I was not addressing the contributors as a whole.

                      Comment


                        #12
                        Just to recap.

                        1: The term "private dwelling" is unlikely to be read as a holiday let.
                        2: The ability to underlet is predicated on it being a 6 month + AST,, unless it is, the rest of the qualifiers are irrelevant.

                        Leases rarely allow detailed assessment of the quality of let, and if they could, would more likely be held as unreasonable. The record of holiday lets and the burden they place on the residents is why there is such a negative response.

                        It is not just the obvious problem that can arise, but the knocks and dents on walls of suitcases being dragged up and down on a weekly basis and the hustle and bustle of arrival and departure that is disturbing in an otherwise quiet block.
                        Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                        Comment


                          #13
                          In a Leasehold Valuation Tribunal in February 2010 they stated "Single private residence: We regard the word "single" to be tautological i.e. that it relates to the premises being used only by one family or household as stated later in the clause. "Private" we consider again to be tautological inasmuch as it relates to one family or household. The word "residence", according to the Oxford English Dictionary means "a person's home; the fact of residing somewhere". We do not consider this limits the person to their normal home: people can make a temporary home by treating their present living accommodation as such. We think this is borne out by the second part of the dictionary definition which reflects the actual living arrangements at a particular time."

                          We understand residents are wary of holiday lets (we have 3 others) but find, for the standard of holiday lets we operate, there is less wear and tear than when there is a long let tenant in (in the past we operated long lets at some properties). In one property where we have a holiday let the area surrounding our entrance is immaculate whereas the property next door which is let long term has "bike bumps" all around the entrance where he takes his bike in and out each day.

                          Thanks for you comments and thoughts though.

                          Comment


                            #14
                            I am aware of the LVT decision, and we have already argued, successfully, that these decisions are not precedent, and that the definition can be flawed if it is out of context.

                            In this case it is not a tautology; the lease clearly intends to create a home for a single family unit for the duration of the lease, or if underlet for at least 6 months, not for a short let of a week or two duration.

                            Once again you can only part with possession to sell or let on an AST of 6+ months.
                            Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                            Comment


                              #15
                              Originally posted by leaseholdanswers View Post
                              Once again you can only part with possession to sell or let on an AST of 6+ months.
                              A holiday let does not mean you part with possession (this is specifically mentioned in our Terms and Conditions of any holiday booking which they have to accept before they can stay). We have successfully argued this on a different property, we always have the right of entry to the property, even when a guest is staying, we use the post box (not the guest) etc

                              Comment

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