These include the subletting consent and the registration, and involve absolutely minimal bureaucracy by the freeholder and his managing agent. Yet charges are routinely £100 – £135, and then there are registration fees of around £75.
Our advice to leasehold owners when faced with these demands is:
1/ To cite the Upper Tribunal cases of last year, where George Bartlett, QC, ruled that £40 plus VAT was a reasonable fee. Leasehold owners renting out their properties (where no sum is specified in the lease) should offer to pay this sum.
2/ If the freeholder persists and threatens legal action, our advice to leasehold owners is to pay the money, stating that the sum will be disputed at the Tribunal and you will be seeking costs (as this issue has been clearly ruled upon in the Upper Tribunal).
3/ It is important that leasehold owners pay and launch their action as the applicant to avoid freeholders do the usual: winning by the bullying threat of legal costs. If you are the applicant, having paid the disputed sum, the chances of you having to pay legal costs is minimal (that is, if you mess up the case – or don’t turn up to an oral hearing (if there is one) – and lose).
4/ It is important not to just ignore the demand as it could be logged as a charge against the property, which will surface as an issue when you try to sell it.
Today we have been informed of a case where a leasehold owner has discovered that no subletting fee was due in his lease and the management caved in once this was pointed out.
The email exchange is below:
I have just read your article dated June 15, 2012 relating to sub letting and lease agreements.
It sounds like an area you are highly knowledgeable on and wondered if I could ask you a very quick question.
I have received a letter from XXX Management who have asked me to pay them £100 + VAT for consent to sub let my flat. I have checked through the lease and at no point is the requirement to sub let needed or mentioned in the lease.
This is not the first time that XXX Management have requested money from me that I do not owe them so I am being very vigilant.
My question is can they still try and get me to pay for consent?
I appreciate any quick advice you could give me.
Kind regards, TB
It is a game of bluff and your decision.
I recommend disputing it, then paying up if they are persisting and then demanding the money back at LVT – which means they cannot stiff you for legal fees.
The threat of legal fees is the issue here and if you mess up any aspect of this (as the respondent) you could be liable for them.
In any case, you cannot sublet without informing the freeholder or his agent.
Also, do not let a debt linger on the property or they will pop up with demands when you come to sell and you need the freeholder’s co-operation.
Best wishes, Sebastian
Thanks for your response and advice on this.
As this is your area I thought you may be interested to know the outcome.
I replied by e-mail to XXX Management with the following;
I am writing in response to your letter dated **** regarding the sub letting of ****.
I have to inform you that this is the first correspondence I have received regarding this issue. It appears from your letter that you have made contact previously.
Secondly I would like to point out that as detailed in the lease that I signed when purchasing the flat prepared by (solicitor) does not require any approval to sub let nor does it state that any fee shall be payable for this.
Can you please come back to me as soon as possible on the above matter?
And received the following response;
I refer to your email dated 10th September 2013, the contents of which are duly noted.
I concur, having reviewed your Lease I note that there are no restrictions to prevent you from subletting the property so I apologise for this oversight. Our accounts have been noted and the subletting charge removed and I have personally noted on there that Consent is not required.
I apologise for any inconvenience that this may have caused.
Since taking over the management of the block this is the second threatening letter I have received from the management company asking for further money, both times when questioned they have then agreed not to pursue the charges.
Kind regards, TB