Freeholder's sublet fee

scriv

Please.....

A reminder to all leaseholders with New Build Houses and Flats built since 2005 to please complete the Leasehold Survey mentioned in the MSE Newsletter as Campaign of The Week - and linked on Martin's Twitter on this website viz :

Are you a leaseholder / commonholder pls complete this survey to provide info for the All Party Parliamentary Group https://t.co/jBtZuHldnX

or alternatively via the post on the MoneySavingExpert Surveys Board at :

http://forums.moneysavingexpert.com/forumdisplay.php?f=255

It is crucial for us leaseholders that as much information as possible about the current situation is submitted to Parliament for its review on Leasehold Reform later this year, hopefully leading to establish a much fairer and more transparent system.


Thank You

willga

Dear All,


I have just received a similar E&M letter demanding a sub-let fee (having ignored the last one back in 2017).

The letter claims to be representing a company I have never heard of which was established in 2009. I bought my flat years before this, and the original lease I signed makes no mention of sub-let fees. In fact, the lease states that terms stand until review 25 years from that date.

How enforceable is the sub-let fee, if the original contract pre-dates the existence of the freeholder? Are freeholders allowed to unilaterally change the terms of the lease to benefit financially?

I would be very grateful for your advice.

BW

eddddy

willga wrote: »

The letter claims to be representing a company I have never heard of which was established in 2009.

Are they your freeholder (or your freeholder's managing agent)?

Assuming they're your freeholder (or freeholder's agent), it doesn't really matter whether you've heard of them or when they were established.

willga wrote: »

I bought my flat years before this, and the original lease I signed makes no mention of sub-let fees.

If your lease says you require your freeholder's consent to sub-let, then your leaseholder can charge a fee for giving consent.

If the lease doesn't mention a fee, then the fee charged must be 'reasonable'.

(As stated earlier in this thread, £40 might be a reasonable fee.)

willga wrote: »

In fact, the lease states that terms stand until review 25 years from that date.

Are you sure? Ground Rent might change (or be recalculated) after 25 years...

... but it would be very unusual to have a lease where the terms can be reviewed after 25 years.

willga wrote: »

How enforceable is the sub-let fee, if the original contract pre-dates the existence of the freeholder?

The fact that a lease was created before the freeholder existed is irrelevant.

The lease is enforceable by both parties - freeholder and leaseholder.

willga wrote: »

Are freeholders allowed to unilaterally change the terms of the lease to benefit financially?

No - definitely not.

Miffybtl

I have also reacently had a letter from E&M stating that i need to pay a regestration fee totalling £195 which is in fact made up of 2 payments which are new tenancy of £130 and a renewal charge of £65.
They also want this payment retrospectively which could add up. I have read that the land tribunal have said that subletting fees should not be more than £40.


Here are the extracts from my lease with regards to subletting


24. "Not at any time during the said term seperatly to assign transfer underlet or part with the possession or occupation of any part or parts of the demised premises but only to assign transfer u derlet or part with the possession thereof as a whole and not so to assign transfer underlet or part with the possession or occupation of the demised premises during the last seven years of the said term without the prior written consent of the lessor or its agents ( not to be unreasonably witheld )"


25. "On the occupation of every assignment or transfer of the demised premises for the term hereby granted and in every underlease or tenancy agreement (which expression shall in this sub-clause include any immediate or derivative underlease or tenancy agreement but shall not include any underlease or tenancy agreement for a term not exceeding twenty years granted at a rack rent and wthout payment of fine) of the whole of the demised premises to insert a covenant by the assignee underleasee or tenant as the case may be directly with the management company to observe and perform the covenants on the part of the lessee and conditions contained in part two and three of eighth schedule of this lease"


26. "Within one month of the date of every assignment transfer mortgage charge underlease or tenancy agreement (including any immediate or derivative underlease or tenancy agreement)! of the whole or part of the demised premises for any term assignment of such underlease or grant of probate or letters of administration order of court or other matter disposing off or afeecting the demised premises or devolution of or transfer of title to the same to give or procure to be given to the solicitors for the leassore and separately to the solictors for the management company notice in writting of such disposition or devolution or transfer of title with full particulars thereof and in the case of an under lease (and if required by the leassore or the management company) a copy thereof for registration and retention by it and at the same time to produce or cause to be produced to them the document affecting or (as the case may be) evidencing such disposition or other matter to pay or cause to be paid at the same time to the leassore's solicitors and to the management company's solicitors such reasonable fee appropriate at the time of registration (but not being less than five pounds in each case) in respect of any such notice perusal of documents and registration affecting the demised premises"


Do you belive that the land tribunal ruling applies to me and if so what would be my next step?
Does anyone have a template email/letter that I could send to them?

kattmatt

Miffy this may be useful for you!


Hi,


I challenged E&M recently after seeking advice from LEASE org, who were really helpful. I was being charged £130 for each new tenant and £65 for a renewal. They have now reduced my new tenant fee to £40 after I sent my email, but are stating they won't send a consent certificate. This is now the next bit I shall have to sort out, but it's good they've reduced the fee! I'll put the email I sent them below as this worked and was given to me to use by LEASE:-


(Put your account no as ref and address of property you let)

[FONT=&quot]
[/FONT]
[FONT=&quot]With regards to your email, [/FONT][FONT=&quot]clause 22 on page 30 of our lease stipulates a reasonable registration fee (adjust to what suits your lease!). We do not consider that £130.00 for registration/admin is a reasonable fee.[/FONT]

[FONT=&quot]In accordance with the Land Tribunal ruling of 2012, a fee of £ 40.00 + VAT is considered reasonable and the fee should not be above this amount.[/FONT]

---

This is all I sent and they backed down and will charge us £40 from now on for each new tenant. I've just got to look into the issue regarding the consent certificate, but a good result so far!


I just hope more people stand up to them, it's awful! Maybe it will be a future PPI issue where we can all get our money back lol!


You can take them to a 1st Tier Tribunal and I would have done, maybe we will in order to get the consent certificate, but if we do that, I will also claim for previous overpayments.


Hope this is helpful to people as it doesn't take a minute to do and saves a lot of money, go for it!!!

SmashedAvacado

I don't agree with much of what is said above

The fee we are talking about is the fee for receipting notice of the AST not for giving consent to it - because no consent appears to be needed. That is literally the admin fee for the landlord receving your notice and generally would be around £25. I can't see how they could justify the need retrospective notification.

kattmatt

An update here.


I have sought advice again from LEASE and they have confirmed we do not need consent to sublet the flat, so we don't have to worry about E&M not providing us with a certificate of consent.


Smashed Avocado - not being in the legal profession and this being our first flat, we were unsure as to whether the cost charged was purely admin or admin and consent, but now we have been advised, are now clear on all this.


I hope my posts help others who are in the same boat :j

aljowales

Hi all,
I’ve read this with great interest. I own an apartment and pay ground rent to E&M. I’m just in the process of preparing to rent out my apartment and have only tried to contact E&M today. Their phone number is incorrect and was answered by a very frustrated lady! Anyway, I’ve since found an online form on their website that I’ve completed and now await further information from them.
From this, what do I need to look out for? Thanks in advance.

SmashedAvacado

This clause doesn’t require you to get consent but only notify

As such they can only charge you a fee for receipt of notice and not for consent

curehead

ok, regarding reasonable amount, I understand this to be around GBP 40 for a new tenant.

Now, what is actually defined as a renewal? I am renting out my London flat on an AST with an initial 6 months term that automatically continues thereafter month after month. I paid the 130 pound initially, but am now asked to confirm whether it is still sublet. The initial 6 month period ended in March 2018. So do e&m now have a valid claim for a 65 renewal? It's not a new contract and the tenants are the same. What is the general consensus on this?

thanks