Freeholders Imposing New Clause :(

SureshM

Hi All,

I am currently in the process of buying a leasehold flat - it is an ideal property and I think I have had a very good offer excepted. Everything seemed to be going great, i.e. mortgage in place, solicitors, etc etc, but now the solictors contacted me saying the freeholders are looking to put in a new clause which would restrict me from sub-letting the property??

My intention was to live there for a couple of years and then let it out as an investment property.

Given the lease has 900 years left, is this possible for them to propose this?? Why would they want to do this? What would be my best action going forward? I really do love the flat and would not want to give it up.

Any advice would be greatly appreciated.

Thanks.

anselld

What does the proposed clause actually say? Many such clauses include words like "permission not to be unreasonable withheld", ie the freeholder wants to know what is going on and protect their interest, not necessarily prevent letting. What is yous solicitor advising?

edgex

also, will your mortgage allow you to rent out the property?

SureshM

In summary, the solicitor wrote to me and said: "The existing lease is old and requires updating - the new deed, if completed, will restrict you from sub-letting the property in the future as the freeholders are trying to ensure the block is occupied by the owners of the properties."

The solicitor is trying to find out how many people have actually signed up to the new lease and whether or not it can be negotiated and taken out.

I don't even mind a clause restricting me from letting to the council, for example, but to not let the property overall is unreasonable.

The estate agent has offered the potential of a lower price - but is there a point? What would be the chances of selling the property on?

anselld

SureshM wrote: »

The estate agent has offered the potential of a lower price - but is there a point? What would be the chances of selling the property on?

Many buyers not intending ever to let will see this as attractive I suspect, but still not good for you if that is what you really plan to do.

hostman

I wouldn't proceed if that clause is in the lease. You never know what you may intend to do down the line.