gooper77 Posted October 19, 2010 Report Share Posted October 19, 2010 I'm letting out my flat in London, which is leasehold. To do this, I needed to get permission from the freeholder who wants to charge £400 (comprised of a £350 administrative fee and £50 solicitor's fee). This to me seems excessive, so I would just like to get a sense from other landlords who have obtained similar licences what they pay for this. (The licence itself is only a couple of pages and must be renewed on an annual basis, regardless of whether the tenant has changed.) If anyone agrees this is excessive, I would be interested in any tips in how perhaps to redress this, if there is a way, without incurring costs of the legal system. I am also very aware I need their permission to let the property out, so want to avoid 'rocking the boat'... Link to comment Share on other sites More sharing options...
Mortitia Posted October 20, 2010 Report Share Posted October 20, 2010 I agree to the rest of us it does sound excessive but you don't say what your expected take in rent is on a London flat? You could try approaching freeholder for a rethink but you may be wasting your time. He is on a nice little earner - this is why people buy freeholds at auction - especially London ones. On the positive side the fee is tax deductable. Mortitia Link to comment Share on other sites More sharing options...
gooper77 Posted October 22, 2010 Author Report Share Posted October 22, 2010 Thanks Mortitia. The rent is £875. I think I expected as much, but it does seem that I just have to accept the charges they want to make for this but as I'm not making any money from renting (not their issue of course) it does rankle a bit! In addition they charge a separate management charge / ground rent which equates to £500 for which they do nothing! Link to comment Share on other sites More sharing options...
Mortitia Posted October 23, 2010 Report Share Posted October 23, 2010 The golden rule when buying a leasehold flat is to check out the mangement fees, ground rents and any other charges such as this 'rental' charge. Grooper - it would be interesting to know if you would not have gone through with your purchase if you had read the small print? Mortitia Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted October 23, 2010 Report Share Posted October 23, 2010 You need to read you lease but saying that i have heard of some leaseholders requesting a break down of how the cost requested is made up and and to justifie it. I have also heard some have got a reduction by doing this. The other option is to not tell the freeholder you are subletting. Or not let them know when a contract comes up for renewal because they will want another fee. If you dont pay i see the freeholder has 3 choices: Doesnt do anything Trys to enforce it through the small claims court. You could have a defence that it is unfair charge. The freeholder threatens you with forfiture. (very very hard to enforce) Link to comment Share on other sites More sharing options...
Mortitia Posted October 25, 2010 Report Share Posted October 25, 2010 Speedtwin - By not telling his freeholder does Grooper run the risk of voiding his buildings insurance - this would be paid by/the policy put in place by the freeholder? An extra risk is added where flats are not owner occupied. Mortitia Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted October 25, 2010 Report Share Posted October 25, 2010 Possibly I dont know. He is intitled to see a copy of it so he could find out. The main reason these charges exsist is because it is a extra income stream for the freeholder or the managing agent. Link to comment Share on other sites More sharing options...
gooper77 Posted October 29, 2010 Author Report Share Posted October 29, 2010 Possibly I dont know. He is intitled to see a copy of it so he could find out. The main reason these charges exsist is because it is a extra income stream for the freeholder or the managing agent. I do get into bother with the buildings insurance which is the only reason I go through with getting the sub-licence as it's not worth the risk. Re: checking the small print on the lease, I did but was impossible to find a flat in same area that wasn't leasehold and didn't have similar issues. That one i have to just accept. What it didn't say was the ridiculous rip off that is the sub-let licence fee. I am reluctantly thinking leasehold valuation tribunals might be the way to go, but as i think the f/hldr is a bit dodgy anyway am holding off on that as the last resort and wouldn't be sure what implications there might be for the rental income/tenancy if i did that. For example, the f'hlr could decide to get difficult and not renew the sub-let licence, etc. etc. and start causing other problems for me. I guess a rhetorical question, but why is there such a shocking lack of legislation to protect leaseholders and landlords alike...?! Thanks for the feedback anyway...! Link to comment Share on other sites More sharing options...
Guest jeenamenon Posted November 12, 2010 Report Share Posted November 12, 2010 I have read above information and from all of I want to include sub-licensing is really allowed to leave the form. In order to create a sub-lease agreement with another part of the current conductor has been granted the right to sublet part of the license-let agreement. At the end of the original contract of the current tenant and the tenant can create a new lease with the landlord. They can also be run from the end of the term. Link to comment Share on other sites More sharing options...
SPEEDTWIN Posted November 12, 2010 Report Share Posted November 12, 2010 None of that post makes any sense to me whatever. Is it me? Link to comment Share on other sites More sharing options...
Newcomer Posted March 11, 2011 Report Share Posted March 11, 2011 After 4 years of us owning and renting out a leasehold flat in a block of 11 through a reputable Lettings Agent, the Freeholder's Estate Management Company has now demanded a "licence" fee for subletting our leasehold flat, plus a fee each time our rental agreement with our tenant is extended, or a new tenant moves in. The need to request the agreement of the LESSOR (the Freeholder) is clear in the terms of our lease. We are not disputing that. But after giving notice of the sub-let, ( which "shall not be unreasonably withheld) we must (according to their communication) also submit to them a copy of our tenant's signed agreement to rent from us, AND pay a "reasonable fee" for doing so. We do not think that the LICENCE FEE demand of at least £135 to obtain the Lessor's agreement (the LICENCE), plus a £75 fee for the notification of OUR TENANT'S RENTAL AGREEMENT WITH US (each time this is renewed or "replaced") is at all reasonable. The Lessor's Agents also propose an alternative fee structure paying £330 up front for the LICENCE and a reduced notification fee of £37.50 (50% off). As they base their demand on the work (sic) they have to do in applying the relevant clauses of the lease on behalf of the Lessor, this bargaining stance on fees seems to indicate that they are not measuring their work input to calculate the true cost to them at all, but just charging what they can, with "incentives" to pay more up front and less down the line. Has anyone any comments to make on this, or advice to give? We have tracked down information on Leasehold Valuation Tribunals, but want to know if there is any sensible action we can take before reaching such a stage to dispute the level of fees proposed as they do seem excessive and unwarranted to us. Thanks. Link to comment Share on other sites More sharing options...
Mortitia Posted March 14, 2011 Report Share Posted March 14, 2011 I don' think there is much you can do. As rents increase so these spurious charges making it just worthwhile to let. I am a big watcher of property auction sites and have noticed that in London and the south in general when freeholds/gournd rents come up for sale they are snapped up at a reasonably low price. Buyers obviously know how to crank up the charges to make the most of their asset without actually purchasing a property. It is quite a good business plan. The ideal is to to try and buy a flat with a share of the freehold and manage the property yourselves without outside interference. These seem to be a bit thin on the ground in the more affluent areas. Mortitia Link to comment Share on other sites More sharing options...
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