Freeholder rejecting variation to lease

propertyman

What is the variation that you wish to get the landlord to agree to?

fannyanna

propertyman wrote: »

What is the variation that you wish to get the landlord to agree to?

Our lease restricts the property from being let. The reality is that the freeholders have said that they're flexible and would issue consent. This wasn't good enough for our buyers and they pulled out.

My solicitor then wrote to the freeholders and said the restriction proved a barrier to selling the property. She also outlined that the reality of them issuing consent was still not sufficient. On that basis she asked if they would agree to vary the lease. The freeholders wrote back to say they agreed providing we paid their legal costs.

So on that basis I agreed to pay the costs for them to vary the lease. The deed came back and had been changed to say that consent would be needed (which is the same position as before and not acceptable). Our buyers said it wasn't good enough so my solicitor marked up the document to remove the need to get consent and now the freeholders are saying that they wont approve it.

I don't think they're going to budge so the reality is that I'm going to have paid £550 to be in the exact same position as before - and once again lose my buyers.

propertyman

Unless the lease is particularly onerous or restrictive then I will be frank and say that you are getting pretty poor advice and help.

If it says that it cannot be rented out then that is not a restriction but a prohibition.

Can you please clarify?

The vast majority of residential leases contain a covenant requiring the landlord to give consent to underlet.

However the law is very clear in that consent cannot be unreasonably withheld, and in doing so makes them liable to damages.

refer your solicitor to the Landlord and Tenant Act 1988, in fact I would beat them with it ( no don't you do that )

That however doesn't help you with your buyer who might want carte blanche when it comes to letting, and may choose to walk away rather than seek consent and pay fees each time they let. In a buyers market they can.

Your solicitor should also have noted that most leases have ( and should) contain a covenant that all the leases are in similar form. That means that if the leases have that restriction, then they can't vary it at all, or in the best case, not by that much.

Idea:

Would the landlord be prepared to enter into a consent to underlet for say 3 years on the basis that the (new) leaseholder only lets on certain terms that , if applicable, are the FH's standard terms, eg no HB tenants assured short hold tenancy of no longer that a year with a 6 month break clause.

This means they need not get consent every time.

Try it.

richardw

fannyanna wrote: »

..The deed came back and had been changed to say that consent would be needed .

or does the freeholder just want to be notified of when the flat is being let out so they can keep track of things?

fannyanna

Rather than wait for my solicitor to pull her thumbs out of her derriere I have called the freeholders to find out the situation.

They have confirmed that they will not approve the deed that we want and have said that they would always want to maintain some form of control and issuing consent is their way of doing that. I understand their position but I'm annoyed that they had agreed to the amendment in principle and are now rejecting it. I've logged a complaint with them.

propertyman wrote: »

Unless the lease is particularly onerous or restrictive then I will be frank and say that you are getting pretty poor advice and help.

If it says that it cannot be rented out then that is not a restriction but a prohibition.

Can you please clarify?

The vast majority of residential leases contain a covenant requiring the landlord to give consent to underlet.

However the law is very clear in that consent cannot be unreasonably withheld, and in doing so makes them liable to damages.

refer your solicitor to the Landlord and Tenant Act 1988, in fact I would beat them with it ( no don't you do that )

That however doesn't help you with your buyer who might want carte blanche when it comes to letting, and may choose to walk away rather than seek consent and pay fees each time they let. In a buyers market they can.

Your solicitor should also have noted that most leases have ( and should) contain a covenant that all the leases are in similar form. That means that if the leases have that restriction, then they can't vary it at all, or in the best case, not by that much.

Idea:

Would the landlord be prepared to enter into a consent to underlet for say 3 years on the basis that the (new) leaseholder only lets on certain terms that , if applicable, are the FH's standard terms, eg no HB tenants assured short hold tenancy of no longer that a year with a 6 month break clause.

This means they need not get consent every time.

Try it.

The lease in its current form says:

"To use the demised premises as a private residence only for the sole occupation by the Lessee and the family of the Lessee."


The deed came through as follows:

"To use the demised premises as a private residence only and not to part with possession of part of the demised premises as distinct from the whole and not to sub-let the demised premises without the previous consent in writing of the Council such consent not to be unreasonably withheld or delayed."


The buyers confirmed it wasn't sufficient so we wanted to remove the wording about consent but the freeholders have said no.

So the buyers are basically being really picky but that's the situation that we find ourselves in.


I'm trying to get hold of my estate agent so that he can tell the buyers that the deed wont be amended again. They can then decide what they want to do (which will be to pull out again).

It's got to the point where I just want this over and done with. The writing's on the wall and stringing it out it just turning me into a crazy woman .

At least when it falls through (again) I wont have to deal with my solicitor. Now that's a silver lining if I ever saw one :j

richardw wrote: »

or does the freeholder just want to be notified of when the flat is being let out so they can keep track of things?

Yes, they'll only agree to it being amending to requiring consent. But we'd said up front that it wouldn't be sufficient. And in reality they knew that our buyers had originally pulled out because they didn't want to have to obtain consent.

ILW

To be fair to them, it is possible that the freeholders (and the other leaseholders) do not want the place turned into a BTL ghetto, with all the problems that can involve.

propertyman

Ok so that's clear the lease restricts underletting, and they are prepared to vary it to underletting the whole with consent.

That is entirely reasonably and reflects the situation with the majority of long leases.

Your buyer as said simply prefers carte blanche.

As I suggest will the landlord give a licence ( giving consent to let) for the long term?

Be not to unhappy, this variation you should go ahead with anyway as it makes the property much more marketable as

1: many BTL buyers will accept the new clause , as will
2:the average buyer who may need to underlet in the future and likes the flexibility.

Money well spent frankly, even if it's not exactly what you hoped for.

fannyanna

ILW wrote: »

To be fair to them, it is possible that the freeholders (and the other leaseholders) do not want the place turned into a BTL ghetto, with all the problems that can involve.

And I appreciate that. It's not unreasonable for them to want to maintain some form of control.

What I think is unreasonable is the fact that they said they would agree to a variation but have now changed their minds.

Had I known at the time that they would not remove the need to obtain consent I wouldn't have proceeded. I have already paid their solicitors £360 and will have to pay my solicitor £190 for this deed. That's £550 to be in the exact same situation we were in before - whcih resulted in our buyers pulling out.

To make matters worse we had an offer from another buyer a few weeks ago but we rejected it on the basis that this deed was to fix the problem for our initial buyer. We thought it made sense to stick with the original buyer, get the deed and then be at exchange of contracts rather than cutting loose this buyer and going with the new one and having to start from square one again. Which is quite ironic as we're now back to square one

fannyanna

propertyman wrote: »

Ok so that's clear the lease restricts underletting, and they are prepared to vary it to underletting the whole with consent.

That is entirely reasonably and reflects the situation with the majority of long leases.

Your buyer as said simply prefers carte blanche.

As I suggest will the landlord give a licence ( giving consent to let) for the long term?

Be not to unhappy, this variation you should go ahead with anyway as it makes the property much more marketable as

1: many BTL buyers will accept the new clause , as will
2:the average buyer who may need to underlet in the future and likes the flexibility.

Money well spent frankly, even if it's not exactly what you hoped for.

I've not asked about the long term licence - to be honest I don't think it will make a difference.

I can see what you're saying about the positives but to be honest that was always the situation and I feel as though we didn't need a deed to clarify the position. But you're right about going ahead with the deed. We're not getting our money back so rather than it being completely wasted it makes sense to get the deed.

Just very frustrated because the only reason we went down this route was to keep our buyers. We never would have done it otherwise.

Ah well, you live and learn.

fannyanna

Well, it's official - our buyers have just pulled out