flat for sale... advert says property cannot be rented out

conqueror01

Looking at various things (to live in), noticed a flat for sale which says it cannot be rented out. Why would this be?

(It'd be nice to think a property could be rented if you couldn't sell when that time comes)

eddddy

Presumably because the lease says it cannot be rented out (sublet).

Some people prefer to buy flats in blocks with that restriction in the leases, because they believe that owner-occupiers make better neighbours than tenants.

If you want the option of being able to rent out a flat, you'll need to find a different flat (in a different block) which doesn't have that restriction.

silvercar

Written into the lease that they are for owner occupiers only and not for BTL. Preserves the block for owners who possibly have more care for the condition of the block than renters who move on quicker. Also prevents investors who don't let the property but keep it empty and are only there for capital growth/ quick churn.

kinger101

conqueror01 wrote: »

(It'd be nice to think a property could be rented if you couldn't sell when that time comes)

Even if you could let the property to tenants, it would be less desirable to purchasers with a tenant in situ anyway. Many buyers refuse to look at properties currently let.

Tiners

conqueror01 wrote: »

(It'd be nice to think a property could be rented if you couldn't sell when that time comes)

Why would it potentially not sell when the time comes?.. It's only greedy deluded vendors with unrealistic asking prices that find their properties ''can't sell''
Any property that has a fair and realistic asking price will sell relatively quickly and easily.

Newtown

We are thinking of buying a property and we think it has the same clause.
The property cannot be rented out. (share of freehold but 999 year lease. The owner lives next door)

Property in question
rightmove. co. uk/property-for-sale/property-47501580.html?premiumA=true (remove spaces please as it wont let me post link)

I asked the EA . What happens if after 5 years i am offered a job and i need to move abroad and would like to rent the property ?

she said they will then look at that.

I am wondering if this thing is negotiable or fixed and cannot be changed ?

I can understand that they can say you can rent it provided that neighbors are happy with this position or something along those lines.

Also do you think a property is with less compares to a same property in same area which does not have this clause.

Any thoughts ? much appreciated.

boliston

sublet bans make resale very hard - touching and bargepoles come to mind lol

cashbackproblems

I have seen a small number of these during my flat hunt and avoided them regardless of price and they tended to be priced lower. While I have no intention of renting it not having permission to in case of sudden job loss/change of circumstances is not very appealing. Plus there will be less demand when it comes to selling.

AdrianC

Newtown wrote: »

We are thinking of buying a property and we think it has the same clause.
The property cannot be rented out. (share of freehold but 999 year lease. The owner lives next door)

So you are buying two things:
- A flat with a lease.
- A share in the freehold of the entire building. How many flats in the entire building?

Property in question
http://rightmove.co.uk/property-for-sale/property-47501580.html

I asked the EA . What happens if after 5 years i am offered a job and i need to move abroad and would like to rent the property ?

Simple. As it stands, you would be in breach of the lease, and the freeholders would be able to take legal action.

I am wondering if this thing is negotiable or fixed and cannot be changed ?

Everything is negotiable. Whether the other party and you are capable of coming to a mutually acceptable agreement is the question.

If there are only two flats, with equal 50/50 shares, and the other owner does not want a change, then there can be no change, because you will only ever deadlock, so the current position remains. If there are more than two shares, then it's down to a simple majority of leaseholders. If one person owns more than one leasehold flat, they own more than one share and so more than one vote...

AlexMac

Newtown wrote: »

We are thinking of buying a property and we think it has the same clause. The property cannot be rented out. (share of freehold but 999 year lease. The owner lives next door)

I am wondering if this thing is negotiable or fixed and cannot be changed ?...

It might be worth asking how big the freehold unit is and who manages it? If you and the "freeholder next door" are the only two who jointly own the building, you'll be in a strong position to influence what happens in future. If, however, you would only be one of many shared owners of the freehold, or in an inferior role with less "voice" you may have less power. And the other shared freeholders may like things the way they are, or be disinclined to live in a complex where there is a mix of stable owner-occupiers and transient tenants who may change every six months

This (newish? Purpose built? Ex Council?) building looks like an unusual setting for a "Shared Freehold", which IME commonly applies in converted buildings. I assume you already know that "Shared Freehold" is usually shorthand for the arrangement where the freehold is owned by a Company made up of the leaseholder sas Company members.

My last three such tenures were in 19th or early 20th Century buldings; two each comprising six flats, and one slightly larger one of 13 flats. In two cases we appointed one of our number as lead "Director" and let 'em get on with it. In one, we shared tasks equitably; maintenance planning & contracting, finance, insurance, Companies House returns, legal replies to incoming purchasers' solicitors' enquiries, etc.

So when you say

Newtown wrote: »

...she said they will then look at that...

who is "they"?

As "she" is the estate agent, she isn't qualified to comment, and may have it wrong. In fact are you even sure the lease does say no sub-letting? Every flat I have owned (the three above and two more bought as BTLs) has or had a lease which permitted subletting on 6-month or longer Assured Shortholds, but prohibited
shorter term "holiday lets"?

Either way, and even if the other freeholders collectively agreed, they would probably insist you pay the not inconsiderable legal costs of drawing up new leases without the restriction. They'd be unlikely to turn a blind eye, and let you sublet without a new lease, as that could give them problems when and if they come to sell.

So the reply to the Q

Newtown wrote: »

Also do you think a property is with less compares to a same property in same area which does not have this clause...

... the answer is, probably.

Newtown

Many many thanks.

you guys have been very helpful. Loving this forum

:rotfl::beer: