Refused Consent to Let

[ibuk]

Hi,

Sorry if this has been answered elsewhere but I have searched and not found anything quite like my situation.

We own a property which was my wifes main home before we got married and she moved into my house (being larger). It is a 2 storey flat within a managed complex.

The scheme is managed by P4P and in the original Lease dated 1988 (125 year lease) there is a section that states that we cannot underlet, sublet or part with any part of or the whole of the property etc.

It makes no mention of only with consent, just point blank you cannot.

Now we have been trying to sell the property for 3 years now without much luck and cannot afford to not rent it until it is sold. We have previously rented it informally to family/friends. When this was not an option any longer we wrote to P4P and requested permission to let as this was our only option. They granted permission for 12 months and we successfully rented it to a nice couple of tenants via a letting agency. They have moved out of the area and P4P have wrote to us advising us that the property must be removed from the lettings market and they WILL NOT give consent for it to be let again. It must remain empty!

Although the lease categorically states that we cannot sublet, can they refuse permission as this is our only option.

I understand their concern that a large number of rentals may devalue the scheme but I'm equally sure a repossession would do the same and without a rental income that is the route we are heading down as we cannot afford two mortgages and unfortunately it is not selling right now.

Sorry for the long post but basically is there any way we can force the management company/freeholder to permit us to sublet?

Thanks in advance,

Ian

[siva]

I don't think there is any way you can force the LL to allow you to sublet.

It's something I don't know anything about but if it was me I'd look into whether granting of a license might i) be allowed; and ii) would solve your problems.

Leaseholdanswers probably knows the answer.

The other thing that always interests me in these situations is if the lease were owned by a limited company. Would the tenant being a shareholder or director get around the problem? You could perhaps issue 100,000 shares and give 1 share to the the tenant with some legal agreement in place as a substitute for the tenancy agreement? Even if viable, it's probably too much messing for most people.

[Gordon999]

Ibuk,

This OFT report may contain some "unfair terms" info to help you ( see clauses 4.22 onwards )

http://www.oft.gov.uk/shared_oft/rep...rms/oft356.pdf

[ibuk]

Thanks for the replies so far. Gordon999 that's an interesting document which might come in useful.

I am aware we (my wife) agreed to the lease etc. but personally leasehold has always wound me up a bit. How can you pay several tens of thousands for a property but not actually own it and (within reason) decide what you do with it!

In this situation we are not looking for a long term rental investment (firstly theres not the market in the area for a sufficient rental income). We are merely seeking to rent the property as needs must. The rent will pay the mortgage until such time as the property can be sold and nothing more. In fact we are still making a small loss on the property as far as rent vs mortgage is concerned.

Thanks

[hansa]

In this situation we are not looking for a long term rental investment (firstly theres not the market in the area for a sufficient rental income). We are merely seeking to rent the property as needs must. The rent will pay the mortgage until such time as the property can be sold and nothing more.

Why can't you sell the property?

Have you considered auction?

[ibuk]

Why can't you sell the property?

Have you considered auction?

We have but due to a fair number of repossessions in the locality prices for a freehold terrace are similar to our property and theres no service charge etc on freehold.

We have reduced the asking price to below the outstanding mortgage and we are willing to take a hit, but we can't take more than around £3k loss really unless we dip into credit cards which is something I am loathe to do. Does that make sense?

[hansa]

We have reduced the asking price to below the outstanding mortgage and we are willing to take a hit, but we can't take more than around £3k loss really unless we dip into credit cards which is something I am loathe to do. Does that make sense?

Sadly, it doesn't seem like there's any guarantee of limiting your loss to that £3K. The only chance really is if the value of the property increases whilst you are subletting regularly. That may take years.

If there's no equity in the property, there's no point carrying on paying the mortgage with no rent coming in.

If it's still in your wife's name it might be worth her taking the hit now and for her to go into a voluntary arrangement or bankruptcy. Perhaps sublet without permission and wait for the mortgage company to repossess if the LL seeks forfeiture. Speak to a debt adviser. The Citizens Advice Bureau have them.

[Snorkerz]

Worth remembering that a tenanted property may be less attractive than an un-tenanted one to prospective purchasers as
a) they will have to get a buy-to-let mortgage
b) you have no guarantee of removing tenants by date X if vacant possession is required.

Would your current (larger) property be letable and you slum it in the small place until sold?

[leaseholdanswers]

Winds you up....hmmm. Of course you do own it, albiet for a time that in most cases exceeds a normal life time. Restrictions in the leases are there because of the proximity and interdependence of units, if you remove a wall and your semi's side wall falls off it rarely affects me, while if it were a wall holding up your ceiling and my floor in a flat, I dont end up in your living room. Or the new layout means the people in the living below n hear the loo flush every time because you cut a hole in the floor to run the waste.

Sadly the lease has a complete exclusion and that's that. However if you discuss with the neighbours you may find that leases in the building do allow subletting and that you can negotiate a deed of variation with the freeholder.

Now you say two things that intrigue me- one that its two storey and that there are terraces that are similar.

If the flat has no premises under or over it, then it might be regarded as a house and therefore you might try to purchase the freehold and surrender the lease.

[ibuk]

Thanks so much for all your replies.

Sorry if I misled by my post the property is two stories, but is in a bulding that contains 4 such properties on the ground and 1st floors and then a further 4 properties on the 2nd and 3rd floors.

We have, however, come up with a solution that should resolve this. My wifes brother is financially dependent on us and lives in a property we own outright. He has agreed to move into the property we are not allowed to sublet so we can now let the property he used to live in (which is a desirable rental property too!).

Our only sticking point is that the management company have now said the following.

"if someone other than the Leaseholder is living in the property, this is considered to be subletting regardless of whether rent is being paid. It would therefore be advisable not to allow your brother to move in"

Surely if no rent is payable they cannot tell us who can and cannot live in the property?!

[Interlaken]

The management company sound particularly virulent.

I think it unlikely that they can dictate who lives there with no rent changing hands.