No permission to let on lease agreement

Phil000

Hello everyone,

I'm close to the end of what have been an absolutely nightmare-ish house buying experience. I posted already a couple of times on this forum if you're interested in more context. But long story short, I'm trying to purchase a flat in a period house that have been recently refurbished by some developers who are also the freeholders. The flat comes with a 99 years lease.

I recently received all the paperwork and contracts to sign by my solicitors, who also happen to be absolutely useless; they won't give me any guidance on this.

One aspect of the lease agreement that seems excessively restrictive is that - it would seem - I won't be allowed to let the flat, or part of it, like ever. Since I'm a foreigner, and I have family reasons that might bring me back to my country at some point in the future, and other personal reasons that my bring me in the States, this is for me unacceptable. I know that in case I'd have to sort things out with my lender (I'm not buying on a buy-to-let basis), but I need to know that I have not other legal obstacles, in case I decided that is what I need to do.

Specifically, here are the parts where this is mentioned:

5-9.1 Assignment etc in last 7 years of Term
The Lessee must not assign, sublet, charge or part with possession of the Flat as a whole during the last 7 years of the Term.

5-9.2 Assignment, subletting and charging of part
The Lessee must not assign, sublet, part with possession of, or charge part only of the Flat

and

5-19 Use for residential purposes
The Lessee must not use the Flat for any purpose other than as a single private residence in the occupation of one family.

Is it normal to have this types of covenants in lease contracts? How can this be possible? They are basically cutting out half their market?? I don't think I'll sign this unless they change this aspects, but does anyone have any tips on how to make that happen?

Thank you very much for your help.
A very tired buyer

molerat

It does not state you cannot let the flat

Phil000 wrote: »

5-9.1 Assignment etc in last 7 years of Term
The Lessee must not assign, sublet, charge or part with possession of the Flat as a whole during the last 7 years of the Term. You must not sell or let out the flat in the final 7 years of the lease.

5-9.2 Assignment, subletting and charging of part
The Lessee must not assign, sublet, part with possession of, or charge part only of the Flat You must not let out part of the flat, the whole flat can be let.

and

5-19 Use for residential purposes
The Lessee must not use the Flat for any purpose other than as a single private residence in the occupation of one family.You cannot let as a student rent etc to multiple unrelated persons. You must not allow the flat to be used as business premises.

Kynthia

They are fairly common clauses and I get the impression that you aren't interpreting them correctly. Get your solicitor to explain them.

harrys_dad

Kynthia wrote: »

They are fairly common clauses and I get the impression that you aren't interpreting them correctly. Get your solicitor to explain them.

The Op says "my solicitor won't explain them". Sometimes you wonder what people are paying solicitors for.

AdrianC

Phil000 wrote: »

One aspect of the lease agreement that seems excessively restrictive is that - it would seem - I won't be allowed to let the flat, or part of it, like ever. Since I'm a foreigner, and I have family reasons that might bring me back to my country at some point in the future, and other personal reasons that my bring me in the States, this is for me unacceptable.

So don't buy that flat.

Is it normal to have this types of covenants in lease contracts?

Far from unknown.

How can this be possible?

Because it is. There's no law listing things you can't put in a lease.

They are basically cutting out half their market??

Yes, they are. But the other half may prefer to know that the other flats will all be owner-occupiers. Or maybe the developers just don't like BtL landlords. Or maybe they just want to.

I don't think I'll sign this unless they change this aspects, but does anyone have any tips on how to make that happen?

Get your solicitor to ask the freeholder. They may agree to vary the lease, for a fee, which can be as large as they like, perhaps with terms around vetting potential tenants. They may not agree to vary it.

But, as the others have said, that wording appears to only totally forbid letting in the last seven years of the lease (PLEASE tell me it's a lot longer than that?) or to sublet part of it.

Kynthia

harrys_dad wrote: »

The Op says "my solicitor won't explain them". Sometimes you wonder what people are paying solicitors for.

Clearly they need to insist, raise a complaint or get a new solicitor.

Phil000

Thank you everyone. I'm starting to think whether I'm interpreting this correctly. When I first read those terms I read it as "you can't let the entire flat for the last 7 years, you can't never let part of the flat (like a second room), and you basically need to use it for residential purposes only". When I asked my solicitors explanations, he basically told me that I don't have permission to let or rent out the flat (part of all of it), without giving me much context.

I am now arriving at the conclusion that this system is complete madness. Buying a leasehold basically means being a glorified tenant, except that there are no regulations in place to make sure your landlord is not ripping you off or being unfair to you. I mean, other aspects of the lease agreement are that I can "not introduce pets in the flat" or that I need to "clean the windows at least once a month" and that the freeholder has the "right to enter the flat with 7 days notice to make sure the terms of the lease are respected". I mean, I'm paying *LOTS* of money for this crap agreement. If I hadn't invested so much time and money on this flat (other crazy aspect of the English/Welsh way of doing things) I'd pull out right this second. But now I'm afraid it'll take months or year to get back where I am and feel pretty stuck to be honest.

AdrianC

Phil000 wrote: »

Buying a leasehold basically means being a glorified tenant

Yep. Except there's no "glorified". It's a very, very long rental with extra rights and responsibilities.

If you don't like that, then there's a very simple solution. Buy somewhere freehold.

camptownraces

You would be able to let the whole flat to a family unit. You would not be able to let the flat to sharers a room at a time.

No pets in flats is a standard clause - it should prevent people keeping dangerous or noisy dogs in a flat barking all day. Sometimes a clause like this has the rider "without the freeholder's consent" - the freeholder would probably consent to your keeping a goldfish, but you probably wouldn't have asked.

There are some regulations to stop the freeholder ripping you off - look up "first tier tribunal" (previously know as the "leasehold valuation tribunal").

Phil000

Thanks all for clarifying. Looks like the letting out part is better than I thought. I could live with letting it out to the whole family if needed, and not a bunch of students (although I'm sure this will be restrictive when letting it out, as half the people in London are singe or couples willing to share flats with other single/couples - and they could be in their 30s or even 40s). For the pets thing, I don't even want them, it's just the principle (we discussed wanting cats at some point, it is weird to think we're "buying" a flat where we can't - but hey, tough).

MartiMcfly

You do know most people don't give a ***** ?

Of course you can rent out your flat, the important person to tell will be the bank you borrowed from to buy the flat, (unless you got the flat cash) - Even here some people just go ahead and rent it, the bank is hardly going to turn up and check , they even accept a 'correspondence' address, as for the freeholders, as long as you pay your ground rent, they wont give a damn. Most estate agents don't even care....they wont ask for 'proof' you have the freeholders permission, even if they do, you can DIY and rent it out without an agent via the online estate agents who barely care if YOU own the flat ........Welcome to England.....