Freeholder charging £4000 for lease variation

[simonskinner]

Hi there,

I have a two bedroom flat with a 975 year lease and own a share of freehold.
There is a clause in our lease which states "Not to create any sub-tenancy or other occupancy of the demised premises or any part thereof PROVIDED THAT the whole of the demised premises may be let furnished for a period not exceeding twelve months in any perios of 24 consceutive months".
I wish to move and rent this property out, and have spoken to the managing agents and the freeholders in relation to this condition. They have said I can agree to have a variation of the lease (which other tenants have done in the past so they can rent out there flats for more than 12 months) but I will have to pay a fee of £4000 to do so and there would be stringent conditions on any letting including full references of any tenants etc..... I have offered to pay all legal fees associated with the variation to the freeholders solicitor, but they refused saying they are permitted to charge this fee for variation. I have since found out several of the directors had their leases varied several years ago, for only around £400 with no conditions on sub-letting at all.
Is the freehold company able to charge this fee???

[Poppy]

In full - yes. It is a matter for negotiation.

Are you a director of this freehold company? If so, put your objection and proposed fee to the other directors.

Do all lessees own a share of the freehold? If so, canvass the lessees to reduce the fee.

The size of this fee suggests to me that the freehold company wants to discourage any more non-owners living in the block. All those tenants definitely increases admin costs because you need to keep track of owners’ whereabouts and tenants’ details.

If none of the lessees/directors can actually be contacted at their respective flats then you see the problem…

[Tax Accountant]

Have a look around to see whether there was any agreement on this issue at the time the freehold was acquired by all the leaseholders. Also check the freehold company's Memorandum and Articles of Association to see if it throws any light on this subject.

Ask questions to see who has actually entered into deed of variation and how much each one paid for this. If it is only the Directors who took advantage of this, were all other leaseholders notified? If not why not?

Ramnik