Can I rent out my flat?

hareonskis

Hi everyone,
I own a flat in building that contains 3 flats in all. I'm paying a mortgage on it that I can afford just fine under normal circs although it's higher than I'd like. One of the other flats is also owner-occupied and the other is a holiday flat. Between the 3 of us we have a management company that, among other things, arranges buildings insurance for the whole 3-flat block.
I recently got a job in another part of the country and will have to rent or lodge locally while I sell the flat. This is going to be very expensive and I would ideally like to rent out my flat for a while to offset the cost of paying rent and mortgage simultaneously.
But the person on the management company who sorts out the insurance tells me that this would invalidate the insurance. Not only that but that it isn't possible for us to get insurance that would allow me to rent out my flat. It sounds like it's something to do with the fact that there are 3 flats and only one would be rented. 
Has anyone heard of this kind of situation? Does this sound correct? I'm not completely confident that I will get the full story from others in the building because they would prefer that the flat stays empty. 

Any insights gratefully received!

2nd_time_buyer

From the sound of it, you own a share of the freehold. Even so, there is presumably a leasehold agreement in place as well. I would first check the lease does not contain a clause explicitly  forbidding letting out the flat (it would be unusual for it to do so).
With regards to the insurance. It is possible that the current policy does not allow the flats to be let. However, I would be surprised if they can not amend the policy to allow it (with an uplift in the premium). If not, there are certainly other block insurance polices that do allow flats to be let. I would be tempted to get the insurance details from the other person and inquire directly.

2nd_time_buyer

... not to mention that one flat is already let as a holiday let. 

numbercruncher8

If this was somehow true then no flats in small blocks would be able to be let.
The first step is the insurance details, it may exclude it but you could change it at additional cost.
One thing to be wary of is that at the least this person might be unhappy if you rent it out. Have you run through the tax implications? It may not be worth the hassle considering that a flat with a tenant in it will not be as appealing to buyers and hence any money you gain is loss in decreased value.

greatcrested

Impossibleto answer. You need to read

1) the lease you own on your flat. As leaseholder, you should have a copy.

2) the insurance policy for the building. As a joint freeholder, you should have a copy.

But you need to make a decision either to sell, or to let the flat. Trying to do both will at best lead to problems, but more probably simply fail.

eddddy

You'll also need consent from your mortgage lender.

george4064

2nd_time_buyer said:

... not to mention that one flat is already let as a holiday let. 

To be fair the OP described it as a ‘holiday flat’, I read that as more of a holiday/2nd home than a holiday let...

hareonskis

george4064 said:

2nd_time_buyer said:

... not to mention that one flat is already let as a holiday let. 

To be fair the OP described it as a ‘holiday flat’, I read that as more of a holiday/2nd home than a holiday let...

Yes it's a second home that they own. It's empty most of the time. They stay in it for a few weeks a year.

eddddy

So... you need to read your lease to see if it allows you to sub-let your flat.

• If the lease does allow sub-letting, you can probably insist that the management company arrange insurance that covers sub-letting (and the increased insurance cost would probably be shared between the flat owners).

• If the lease doesn't allow sub-letting, you can try to persuade the other 2 joint-freeholders to override the lease and allow you to sub-let. But they don't have to agree, if they don't want to. And they could insist that you cover the increased cost of insurance and/or impose rules about the sub-letting and/or charge you fees for sub-letting, etc, if they want to.