This can be a real blow for those owning residential properties through a long lease with a landlord freeholder or management company behind the scenes, often in a block of flats.
The gist of your ownership is that you can let it out if needed, maybe a buy-to-let investment or you’re just moving out for a while, with the focus often just on the mortgage side of things being agreed. But then suddenly when the above ‘landlord’ gets wind of this they can suddenly be requesting hundreds of pounds to grant permission for this, often through strongly worded letters out of the blue.
However, the good news is that in the majority of cases this isn’t the case and can be a try-on to earn some more fees. And even where there is some legitimate involvement needed from them, the actual cost is often a whole lot lower than what they claim as ‘registration’, ‘standard licence’, ‘deed’, or ‘permission’ costs.
So don’t panic, here are a few practical pointers to help begin getting to the bottom of these and knowing how to respond to such claims:
1. What’s the Charge For
Clarify what on earth this cost is for, often falling into one of two areas.
Firstly, to actually grant permission to your new occupier, with an element of them needing to check and agree the actual proposed scenario. The second is to just have information and notice about the arrangement which means they will have less involvement (and charge) for any kind of vetting.
So read carefully what they are saying, ask them to clarify the exact reason if needs be, and check what your actual long lease says.
2. Watch Out For Renewals & Retrospective Charges
Although these requests tend to get triggered when you first begin to let out a property, watch out for similar charges and so-called involvement being needed for any lease renewals in the future. So if you begin with a simple 6 month AST tenancy to a new occupier, then when this is renewed again in the future this should be easy-peasy and not triggering yet extra landlord involvement and charges.
Also, if they spot that you’ve had an occupier in there for years, watch out for extra charges for going back in time and agreeing retrospective arrangements. This can soon rack up unnecessary past-tense costs, and even if in principle it is permitted, the landlord may have waived their right to chase this after not addressing for so long.
3. Clarify if for Sales not Lettings
When you check your lease there can often be reference to a notice and registration cost being due for when you dispose or assign the lease interest, which is a different situation to having short-term occupiers in there.
This is when you sell the whole property and basically transfer the whole long lease to someone else – formal registration will be needed through the buyers’ conveyancing solicitors with a small charge of maybe £50 or so being due.
This is separate to talk about sub-letting and shared occupation on a temporary basis while still holding the long lease interest.
4. Check if Solicitors Should Have Spotted
If there are legitimate charges and permissions to gain, then this really should have been pointed out when you first purchased the property by your solicitor, particularly if they knew you were buying for this purpose straight away as, say, a buy-to-let investment.
It’s therefore worth checking with them, and at the very least seeing if they will now provide some free legal advice to resolve going forward.
5. Understand Your True Landlord
Just make sure that whoever is now requesting this cost and involvement has the legal right to do so. If they’re an appointed agent, then on whose authority are they acting for and in what capacity.
Even when you do know who the landlord is, make sure this is literally the legal landlord of your property. In addition to checking this capacity within your lease, and whether a direct freehold landlord or, say, a separate management company, if they have sold the investment on afterwards then just double check they are truly the right owner through maybe a simple land registry check if needs be.
And if the freehold has sold, check whether you were not only informed about this but given the opportunity to actually purchase the freehold as per the legal right with most residential long leasehold situations.
6. Scrutinise Your Lease
Your long lease is the key to what is what is allowed or not, and so go through it with a fine-toothed comb to see what it says. As above, see if it talks about just notice-of rather than full-blown permission for this, and if the landlord does have the right to charge for this.
Make sure the whole lease is checked, and if need be get a solicitor or another good advisor to clarify as well. Nowadays it’s often easy to have a digital copy to send to them, which needs to be the full lease not just the Land Registry transfer document.
7. Insist on Being Reasonable
So where you are needing to involve the landlord, this will need to be on a reasonable basis. This ‘reasonableness’ test should not only be echoed in the lease, but is automatically within various residential legislation that can be legally inferred and implied.
There’s a post here with pointers on how case law shows £40 is more a reasonable charge rather than hundreds of pounds, and you can also threaten to take the matter further to the landlord’s accreditation scheme or First Tier Tribunal for resolving issues.
Even though in reality this can be cumbersome to accomplish, still reply back threatening and showing that you know more than what they think about the reality of the situation, and see if they will begin to back off.
Showing the Landlord Who’s Boss
Therefore when faced with such requests from your landlord, go through these 7 pointers to begin whittling down to see what the reality is and what any reasonable charge should actually be.
Don’t be scared by the bully-boy tactics of these often larger landlords and managing agents fishing for extra fees, but go back and at least ask for clarity on why these are due and that you’re willing to take further action if needs be.
And once you get straight back to them on this basis, keep the momentum going with your letting anyway as you don’t want this to cause you a lost tenant in addition to any costs and hassle.
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