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Saturday, October 11, 2014

Sub-letting fees from freeholder

I have owned a property for the last 12 years.  The property is leasehold apartment rather than freehold which means I have to pay a ground rent to the freeholder.  This is the law and at £37.50 per year it's not expensive.

Change of address
I have just notified the freeholder of a change of address to make sure that I didn't miss any future ground rent demands.  The result of failure to pay the ground rent would be that ultimately a landlord could be exposed to the freeholder taking action for forfeiture and possession.

Sting in the tail
In the acknowledgement from the freeholder there was a sting in the tail.  A demand for another £50 for a so called consent to let.  Further investigation of this revealed that recent case law from the Lands Tribunal indicated that for any such consent the freeholder shouldn't charge anymore than £40

What will happen
I have written to the freeholder asking for the details of the part of the lease that stipulate the landlord is able to charge for this along with an explanation of why it has not happened before given that they have been aware for a number of years that the property has been rented out.  It will be interesting to see if they give me the courtesy of a reply or whether the first thing I get from them is the bill demanding the money later this year.

What are other landlords experience of this?  It would be interesting to find out as I prepare myself for a bit of a fight.

Landlord insurance - flats - hmo - specialist requirements

4 comments:

Anonymous said...

interesting, glad to know about the limit to 40pounds thanks for that

Sladey said...

I was charged £150 which was basically a trawling exercise as they noticed (after 10 years) that my address was not the same as the property.

I checked the lease and they weren't entitled to charge anything at all. I wrote back and told them and asked them to confirm they wouldn't be charging anyone else - they waived the charge and said they wouldn't be contacting other tenants. Not sure if I believe them or not but hey ho.

The Editor said...

Thanks for the tip off. I will make sure I read my lease thoroughly before coughing up any cash!

Michael M. said...

I was sent a demand for £40 subletting fee for one of the properties that I rent out. I contacted somebody who then studied the wording of the leasehold agreement and it transpires that I (and any other leaseholders at that particular development)shouldn't have been charged. I sent an email requesting a refund but,to date, I've not had a response. I suppose I could deduct it from the next ground rent payment? No doubt I would then end up being threatened with court proceedings for the underpayment!
Furthermore, if my tenants move out I have to advise them with details of the next occupants and cough up a further £40!