This binding ruling by the Upper Chamber (Lands Tribunal) of January 2012 should be quoted in all correspondence where freeholders or their agents are demanding sub-letting fees of more than £40 plus VAT which are not specified in the lease
In monetary terms sub-letting fees are one of the more trifling little earners in the leasehold game, but they are deeply resented by flat owners who see that landlords do almost nothing for their money.
Now, it seems, the Land Tribunal agrees with them, ruling in four cases that sub-letting fees should be around £40.
Anyone involved in a dispute with a landlord could offer this sort of sum and be in with a fair chance that that would be the end of it.
Sub-letting fees vary, but charges of £100 – £135 are common, and then there are registration fees of around £75.
Four appeal cases were brought by landlords to the Land Tribunal last February and they were heard together by George Bartlett, QC, president of the Upper Tribunal.
Two appeals were brought by our old friends Peverel, this time trading as Holding and Management (Solitaire) Ltd.
One concerned a Barratt £123,295 flat in Essex, where the owner was being charged of £105 for this (as well as £75 for the preparation of a deed of covenant and £75 for registration).
The other a £104,500 Barratt flat in Reading, which was being rented out under an assured shorthold tenancy agreement for £750 per month. Solitaire wanted a £135 fee for consent and a notice fee of £75.
Another case, brought by Samnas Ltd, concerned a £122,000 flat in Banbury, Oxfordshire, where the company was after £105 , as well as £75 for registration of the sub-letting.
The last was in Milton Keynes and concerned a £166,000 property where Flambayor Ltd was after £135, and £75 for the registration.
In all cases the leases made clear that the properties could not be rented out “without the prior written consent of the lessor and the management company, such consent not to be unreasonably withheld or delayed”.
The landlords argued that registering the sub-letting agreement involved considerable work, but the tribunal was having none of it:
“The appellants seek to justify the consent fee in terms that apply to all consents, and they do so by setting out a list of work that, it is claimed, their agents do. It looks to me to be a list of all the things that could conceivably be done in connection with the grant of consent rather than the things that would need to be done in a typical case or that were in fact done in the cases under consideration.
“I am wholly unpersuaded by the appellant’s [Solitaire] assertion that it would have been necessary for an administrator to spend approximately two hours dealing with the application and the legal department about one hour.
In the absence of any information on the part of the appellant as to what was actually done, by whom and how long it took, I am not satisfied that a fee of £105 for the grant of consent in addition to fees for the covenant was justified or that consent could reasonably have been refused in the event that Mrs Norton [a flat owner] had refused to pay it.
The same goes in relation to Dr Rudnay [flat owner in the case brought by Samnas Ltd]. Doing the best I can on what is before me, I conclude that a fee greater than £40 plus VAT could not be justified, and I determine that this amount is payable.
“In relation to the other two cases a fee of £135 was sought – higher than the £105 because, it was said, the consent was a retrospective one. The appellants have done nothing to show that in these two cases extra costs were incurred. I therefore determine that the amount payable in each case is £40 plus VAT.”