HELP! Lease Variation / Sub-letting Opposed. Buyer Wants to Withdraw From Flat Sale!

Bee150

I own a flat with a share of freehold. There are 9 flats in my building and 8 of us own the freehold of all 9 flats. I am in the process of selling my flat and my buyer has requested a variation in the lease to allow for subletting for periods of 6 months or more.

The lease currently only allows subletting for periods of 7 years or more. I contacted the building manager who is also one of the directors of the freehold company we formed and he agreed to reduce it to 1 year but has refused to reduce it to 6 months.

My buyer has said they will have to pull out if the request is not met. They have no intention of subletting at the moment but they feel that they should have the option to do so should they want or need to.

This is the second offer I have had which has come up against this issue and it is now obvious that this is a genuine issue for potential buyers. I have requested to speak to the other freeholders about the issue but the director has not made them aware of my request and has instead sent them an email stating his reasons why it would be a bad idea for anyone in the building to reduce their subletting periods to 6 months. In my opinion, his reasons can easily be dealt with without imposing restrictions on the subletting periods.

Is there any way I can get this lease varied. Is the director allowed to block the sale of my property or the variation of my lease? Can I make the lease variation if I get the consent of the majority of the other freeholders?

I would appreciate any help on this matter as I NEED to sell my flat ASAP and can't afford to lose another buyer because of these issues.

Thanks so much.

AnnieO1234

Can you please share the relevant portions of the lease? My gut feeling is that there is confusion over what is meant. It's few and far between where leases prevent rentals. xxx

TBagpuss

What is to stop you contacting the other owners of the freehold directly? All other things aside, if you have had two buyers back out for this reason they may take this into account on the basis that they. too, may wish to sell in the future.

Bee150

Thanks for your response. I hope I am able to clarify below...

The relevant portions of the current lease read as follows:

14 (1): Not at anytime to underlet the whole of the premises except by an underlease which shall:- (a) be for a term exceeding seven years at full market rent without a fine or premium and in any event at a rent not less than that hereby reserved;

(2)
At all times enforce compliance by any underlessee with the covenants and conditions contained in this lease


17.On the occasion of every assignment of the premises and in every underlease... require the assignee or the underlessee as the case may be to covenant directly with the landlord and the company to observe and perform the covenants on the part of the tenant and conditions herein contained.

33. Not to use the premises for illegal or immoral purposes


The only section that the buyer wants changed is 14 (1) - they would like 7 years changed to 6 months and they would like this privilege passed on to future buyers.

The building manager insists that he is only willing to reduce it to 1 year and that each subsequent buyer will have to reapply for it to be reduced below 7 years. He insists that this is the ONLY way to make sure the building doesn't become a den of immorality and illegal activity! He refuses to grant the deed variation in spite of the fact that to my understanding, sections 14 (2), 17 and 33 already mean that tenants can be vetted and held responsible for illegal or immoral use and / or breaking any of the other terms of the lease.

I have requested that he call a meeting with the other freeholders. He has ignored my request. I don't feel that the buyer's request is in any way unreasonable. She is a lawyer and hardly likely to turn the flat into a crack den! Can my building manager legally prevent this sale from going through by refusing the buyer's request?

marksoton

What a strange collection of clauses.

I don't know where you stand legally but i'd accept the 12 month sublet and market it on that basis.

Bee150

I don't have all the contact details of the other freeholders. I asked the building manager to contact them on my behalf and he sent a long email explaining the pitfalls and unavoidable dangers of dropping the subletting period below 1 year without letting them know anything about by situation or request!! The other recipients of the email were blind copied.

anselld

Bee150 wrote: »

Can my building manager legally prevent this sale from going through by refusing the buyer's request?

They are not preventing the sale, they are upholding the terms of the Lease. However, it is a decision for the other freeholders, not just one individual.

There is every chance that the other freeholders will not even be as generous as the Building Manager though! If they are all owner-occupiers they may well take a short term view that they do not wish to allow any rentals despite the longer term damage this may do if they wish to sell.

kiddy_guy

I think it's a very simple way of ensuring everyone buying the flats has a vested interest in ensuring they're not simple buy to let opportunities. It encourages a sense of neighbourhood and it has to be admired for that alone. We've seen countless examples of new let neighbours who turn out to be a living hell.

However in your circumstances, 1 year is the best you're going to get. I'd take it.

economic

I'm afraid there's not much you can do. Unless there's a majority freeholder decision to reduce the 7 years, you are stuck with it. You will have to reduce the selling price if you want a sale quickly it seems. Can you not try speak to the other freeholders individually? Mention it make sense to reduce it when it comes to sell for them also.

anselld

kiddy_guy wrote: »

However in your circumstances, 1 year is the best you're going to get. I'd take it.

1 year is not the only issue though; the right to pass on to future purchasers has also been denied which will have more serious consequences on future re-sale.

Bee150

5 out of 9 of the flats in the building are currently rented out. I don't know what their leases look like but I do know that one of the flats had the subletting clause completely removed before we bought the freehold. Another took DSS tenants in the past so I doubt that their lease contains this clause. I also know that 2 other freeholders are wanting to sell soon so this will be of interest to them but I have not yet been able to speak to them.