Letting a leasehold flat

[Andrewd]

First post from prospective newbie "reluctant landlord". Hi.

Getting really annoyed now.

I'm jumping through all the hoops, have been doing everything by the book. I have managed to find two people to share the tenancy, one of whom I've known for several years, the other has been my lodger for a couple of months (and they've both known each other for several years). I'm getting all the legal stuff done, like EPC, and GSC. I have permission from the mortgage company.

The final hurdle (other than the tenancy agreement, which would be in hand) is permission from the freeholder (in my case, the council). I spoke to them and they told me that it was a formality really. I told them it was to a couple of friends and she asked if they were students. I said no (entirely truthful) and she said that's good as I wouldn't have been allowed to let to students.

The formality is a form.

Which says (their bold):

"Under the terms of the Lease the property may be sub-let to a single person, couple or a family. It must not be sub-let to separate, unrelated individuals e.g. students."

Arrrrrggh!

So what would you do now? Would you press on anyway? Or would you try to deal with the bureaucracy and ask for permission to have two "unrelated" but entirely stable, mid to high earning, IT/Professionals in?

The irony is, either one could take it on their own and the council would give me the thumbs up. But I can't have one of them take it and the other sublet as this would be against my mortgage conditions.

What can the leaseholder do? Can they "evict" me, take me to court, force me to sell? What other pitfalls are there? (I'm aware that as leaseholder, I am responsible for the behaviour of the tenants and that any action would be against me - but given that there were some right nasty pieces of work downstairs being rented to, and the council were fine, I don't have any worries that my tenants would be an issue in that regard. They're decent, and quiet.

Hell one of the tenants I have lined up used to rent the flat downstairs. On their own and was a model tenant.

How sympathetic are they likely to be? Or are they unlikely to be able to be sympathetic at all?

Am a bit gutted as this has a huge personal effect on my personal plans.

Thanks.

[jeffrey]

Er, did you not read (and did no solicitor explain) the lease's contents, before you purchased it?

[Andrewd]

Er, did you not read (and did no solicitor explain) the lease's contents, before you purchased it?

When I bought it (3 years ago) it was as a home for me, with no intention of ever renting it out, so it never crossed my mind to worry about what circumstances I'd be able to rent it out. Obviously hindsight, etc.

Fast forward 3 years, circumstances have changed significantly and I have three options really. Rent out. Sell (at a loss). Break up with my partner (met long after I bought). Circumstances mean that she can't move here - this is the easier property to dispose of.

Obviously if the council are immovable, then I have to let my prospective tenants down (no contracts signed yet- though it also would mean moving the lodger out) and find someone else but it's difficult and expensive running two households.

[Preston]

... But I can't have one of them take it and the other sublet as this would be against my mortgage conditions.


Are you sure?

[Andrewd]

Are you sure?

Yeah, it was part of the conditions of the consent to let. (that's what I meant rather than a condition of the mortgage, sorry).

After discussions, they have agreed that as long as it's a single tenancy agreement/contract, that's all they're interested in.

[westminster]

The formality is a form.

Which says (their bold):

"Under the terms of the Lease the property may be sub-let to a single person, couple or a family. It must not be sub-let to separate, unrelated individuals e.g. students."

Arrrrrggh!

So what would you do now? Would you press on anyway? Or would you try to deal with the bureaucracy and ask for permission to have two "unrelated" but entirely stable, mid to high earning, IT/Professionals in?

The irony is, either one could take it on their own and the council would give me the thumbs up. But I can't have one of them take it and the other sublet as this would be against my mortgage conditions.
If you let the property to Tenant1, the other (Tenant2) could be taken in by Tenant1 as a lodger - which isn't the same as subletting as the lodger doesn't get exclusive possession of any part of the property. So check whether this would be okay with the mortgage company.

The downside for T2 is T1 could evict him easily. But if your current lodger is happy being a lodger, he might be okay with that.

[Andrewd]

Thanks Westminster, that was my original hope (that my current lodger would become a tenant and then take a lodger). I was advised that it's not a good idea in that the lodger would have no contract with me - so if my tenant left, I'd potentially be a bit stuck.

I will check with them anyway though, because it might give me a few more options.

Thank you again!

[westminster]

The formality is a form.

Which says (their bold):

"Under the terms of the Lease the property may be sub-let to a single person, couple or a family. It must not be sub-let to separate, unrelated individuals e.g. students."

Also, are you sure this doesn't mean that you can't let as an HMO (house in multiple occupation), i.e. let each bedroom on a separate AST? I would ask the council to clarify whether it means you cannot let to two unrelated people on a single joint tenancy.

[westminster]

Thanks Westminster, that was my original hope (that my current lodger would become a tenant and then take a lodger). I was advised that it's not a good idea in that the lodger would have no contract with me - so if my tenant left, I'd potentially be a bit stuck.

Advised by whom?

If the T left, and the lodger remained, the lodger would be as easy to evict as any other tenant or occupier.

[westminster]

The final hurdle (other than the tenancy agreement, which would be in hand) is permission from the freeholder (in my case, the council). I spoke to them and they told me that it was a formality really. I told them it was to a couple of friends and she asked if they were students. I said no (entirely truthful) and she said that's good as I wouldn't have been allowed to let to students.
TBH, this person you spoke to sounds as though all they know is what it says on the form, and were just parroting the word students.

I find it hard to believe that your lease specifically says you cannot let to students.

Read your lease and see what it actually says about subletting.

[Poppy]

The simplest solution that complies with the lease sub-letting stipulation is to let to one tenant and expect that tenant to have a lodger or paying guest. Make sure that the tenant understands not to give the lodger rights other than a licence to lodge with a short notice period.

[Andrewd]

I know it's a bit to bump 18 months on but wanted to thank everyone again for their advice. Everything went smoothly and I've now taken the flat back (as my wife and I have decided to use the flat as an opportunity to save for a new deposit as we can make significant savings living there instead of renting).

It was a fairly stressful situation at the start, and at the end but it was mostly smooth throughout. I chose to save most of the rental payments and pay the mortgage out of my wages. This worked well and removed all the worry about losing my tenants and needing to pay the mortgage.

Although I was a very reluctant landlord, it all worked out, we got married having lived together for a year which might not have happened if I'd chosen to continue living in the flat.

Just thought I'd tail this thread off, so others in a similar position to where I was can take the positive experience. It was more than worth doing! I'll do it again if it comes to it.

[Lawcruncher]

What does the relevant clause in your lease say exactly?

[Andrewd]

Sorry Lawcruncher, you've probably seen that I was bumping my old thread - I should have realised the confusion that may ensue (and sadly it's not possible to edit the opening post).

:(

[westminster]

Glad it all worked out well!