Renting my flat against terms of Lease - what will happen ?

Juanito70

Hello,

I purchased a flat some ten years ago in London and do not want to sell yet for another 1-2 years. I am going to work overseas teaching and have found a person who will live there for one year while I am away which will cover the mortgage and bills. I unfortunately live with a nosy and not very nice resident freeholder who is retired and they have stated that subletting is against the terms of the lease and in the lease it states about the property being occupied by one residential family only. In fact, they were asking the person questions when they were moving their belongings into my flat in the communal hallway about who they were staying with, paying any rent, etc. The worse thing about this all is that my neigbout upstairs who lives and works in france has been subletting his flat since September 2011 and the resident freeholder knows but has done nothing because this person lives in the loft apartment and does not effect them and because apparently this person is a 'cousin' of the person who owns the flat above me.

I am breaking this rule in my lease I realise, but I do not want to ask permission from the freeholder downstairs because it will be refused and then they will know I am subletting. I am also not informing the mortgage provider because I know for a fact they will increase the mortgage rate I am paying of 3.99% on a residential mortgage to a buy to let rate of about 6-7% and charge a conversion fee of a few grand. I dont see why a boring old daily mail reading retiree and the bank that made me redundant continue to control my life, I am leaving the UK on April 1st for one year and will have to come back to face the consequences.

The flat is all safe and gas/electric things all up to date and modern. My home insurer will cover the personal possessions of the person who is renting my flat under the policy, I am not covered for accidental damage on my flat home insurance policy while a tennant is there.

My questions are..

can my lease on my flat be cancelled by the freeholder for breaking the terms of the lease and I lose the property worth £400k ?

is this process called forfeiture of lease and how often does it happen ?

what will happen if I am not in the flat or the UK to contest any letters from the freeholder about the matter ?

do they have to physically prove or provide evidence that I am subletting the flat I own to get my lease annulled ?

how long is the process to cancel a lease on someone's flat they own and are there are hard evidence or previous cases where someone has been forced to sell or had their property taken away from them if they are found to be subletting ?

Regards

HappyMJ

No...

No...very rare.

Not much.

Yes...so don't sublet it..let your friend stay free you paying them £1 a month to house sit for you...and they pay the bills only.

A very long time.

Juanito70

Hi,

so thats so far so good.

I have found a person to rent, they live with me now and when I leave the UK in April they will have the flat too themselves. I cannot afford to pay mortgage, council tax and bills totalling £900 when I am in a third world country teaching english. I have just about enough to pay for a room there and living costs.

So I guess just have to keep an eye on the post and a letter about subletting from the resident freeholder.

I am not asking for permission to lease from my mortgage lender even though I have 55% LTV and I am on SVR of 3.99% , I am not moving to a higher based mortgage with fees for renting for 1-2 years, They already peed me off last spring big style by increasing the SVR from 3.5% to 3.99% because a lot of their customers prefer to be on the SVR and not paying a grand every two years to arrange a new mortgage deal.

Cheers y viva america latina, hasta luego Grey Britain, the most expensive island on the planet

AlexMac

Are you absolutely sure the lease prohibits sub-letting? I assume you have a copy. But, did your solicitor point this restriction out at the time of buying, as they should have done, as their role is to explain key features of the lease and this is quite an important one? It seems quite unreasonable and unenforcable? While in theory, breach of lease could lead to the lease being termnated, that could only be done by the Courts. And a court would look at wheter the lease clause was reasonable in your circumstances (loss of job, etc). Leases can control sub letting, but prohibition seems unsual. For example in one of our past flats, the lease prescribed that sub-letting was permitted only for lets of more than six months- in effect to prevent short 'holiday lets', and another required that each and every sub-lets be subject to a deed executed with the freeholder's solicitor binding the tenant to the main lease conditions to protect other residents from anti-social behaviour.

So if the lease really does say that, I'd do as you intend- but rather than telling Mr Nosy to stuff it, I might drop him a note saying that I intended to ensure good conduct on the part of any tenant through the usual clauses about this in the Assured Shorthold Teanacy agreement, and that precedent - the upstairs letting- had demonstrated this was reasonable. Then in the unlikely event he started a long-winded Court action you'd be seen to be an allright companero?

Anyway, good luck with your travels. Hasta luego gaucho!

Richard_Webster

You need to be very clear exactly what the lease prohibits - the restriction to one family only suggests that it is intended to prevent lets to a group of unrelated persons, e.g. students.

What is a family? A couple, or a couple with children? Old couple, one dies, doe sthe survivor then cease to be able to live there? Because of these sorts of issues, I suspect the courts would be slow to say that it prevented letting to a single individual.

However at the end of the day it does depend on the wording,so you would need to set out the whole of the relevant clauses from the lease for us to look at. You mention a restriction on use. There could be restrictions on underletting or allowing the use of the premises by others. You need to read those carefully. A short term tenacy is an underlease/sublease.

If the freeholder wanted to take forfeiture proceedings he would probably need a solicitor to do so, and if the wording is as you say, then I think most solicitors would advise that there was no case.

One thing you must do though - make sure that your tenant forwards mail to you - the freeholder could serve notrices on you at the prmeises which the tenant then could bin - that could result ina dsisaster.

kingstreet

I presume you are with Halifax?

If you arrange a product transfer onto a Halifax customer retention product, this will remain in place even if you soon after request consent to let.

They only alter the rate to a formal CTL product when you are on SVR or your current deal is ending.

Looking at the product transfer rates for 60% LTV or less, there's a 3.39% fix for two years, with no fee payable.

Werdnal

As an aside from the subletting issues, if you go ahead are you aware of all the legal responsibilities of being a landlord, and the tax implications of letting a property here whilst working overseas. Even if the freeholder does not come after you for breaking the lease conditions, you have to comply with other legislation otherwise you can face hefty fines and HMRC will be suing you for tax evasion!

Read this:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

and all the link in contains, specifically for you the non-UK resident LL link.

Your insurance would also be void if there was a claim and the find you have been living elsewhere - your £400K flat could be gutted by fire and you wouldn't have a bean!

IMO if you accept a penny in payment from the person staying there (even if they are only contributing to your mortgage), you are receiving "rent" and therefore a Landlord. Lack of freeholder permission and mortgage consent to let may be the least of your worries ...

securityman

Just tell them if your cousin cannot stay, you are going to have to sell to a housing association because you are working away for a year or so and they will give you an ok price, but a quick sale.

You will not know or care who they move in then!
"So is it ok if my cousin stays so i dont have to sell to a H/A"?

mrginge

I hope the mortgage co find out and ask for immediate repayment

G_M

I would be more concerned about

* your mortgagelender
* you insurance
* the Health & Safety Executive (re gas certficate)
etc

Read the link in Werdnall's post above

thequant

Juanito, how would you like it if your tenant, doesn't move into the flat and sublets it to someone else ?

Well this is exactly what you are doing to your Landlord (i.e. freeholder)

What about if said subletting tenant, recieves say £1500 pcm and only gives you £1000 pcm ?

Well this is exactly what you are doing to your mortgage company.

funny that these amateur landlords, will get all arsey about their tenants and moan about them on here, while at the same time they complain about how unfair their leases are.