Sub-letting leasehold – I want to rent out my leasehold flat but the managing agent says the freeholder won’t allow it. I know that other flats in the block are rented out, so what can I do?
Landlords usually prohibit sub-letting to safeguard the interest.
Landlords usually prohibit sub-letting to safeguard the interests of other leaseholder occupiers, on the grounds that too many tenant occupiers diminish the value of the flats.
Sub-letting without the landlord’s consent is definitely risky. Should your landlord or the managing agent find out, often through a neighbour informing on you, then legal action could ensue. You could even be threatened with forfeiture of your lease.
You could then in theory be at risk of losing your property unless you remedy the matter within a prescribed period of time. In practice lease forfeiture would only ever happen with the permission of the Leasehold
Valuation Tribunal (LVT) or after the landlord has obtained a court judgement.
It’s important when buying a flat that your solicitor is informed that you may want to rent it so that during the conveyancing process the lease can be thoroughly checked, and if the freeholder agrees, amended to allow sub-letting.
Leasehold clauses will usually still apply even if this is a shared freehold.
If the lease is silent on the issue of subletting then there is no restriction and the leaseholder is free to sub-let.
However, it is common that the lease includes a clause which is a covenant (promise) not to sub-let without the landlord’s consent.
It is usual however that any such restriction in the lease will be accompanied by a statement which says that consent cannot be unreasonably withheld. If the lease is silent on the issue of reasonableness then there are overriding provisions in statute law which imply a test of reasonableness: the Landlord and Tenant Act 1927 section 19(1) states that any such restrictive clause must always be qualified by the premise that consent cannot be unreasonably withheld.
Any landlord / freeholder receiving a written application for permission to sublet must reply formally and within a reasonable time. If the landlord refuses permission, he must give valid reasons.
If on the other hand consent is given subject to some conditions, then these conditions must also be reasonable. If the landlord does not reply to a written request for permission to sub-let, or refuses permission on reasonableness grounds, the tenant could sue the landlord for damages.
By Tom Entwistle,
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©LandlordZONE All Rights Reserved – never rely totally on these general guidelines which apply primarily to England and Wales. They are not definitive statements of the law. Before taking action or not, always do your own research and/or seek professional advice with the full facts of your case and all documents to hand.