Change to stop rentals in flat development?

Change to stop rentals in flat development?

by Readers Question

Guest Author

0:02 AM, 12th December 2023, About 7 months ago 16

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Hello, I have owned 3 flats in a block of flats for 20 years, which I rent out, and the service management company have just changed hands and decided unilaterally to not allow rentals there because of “antisocial behaviour”.

I had just agreed to sell one of these to an investor and the management charged me the fee for the sellers pack, and then in the last few weeks, they decided that the new buyer wouldn’t be able to rent it out, I’m flabbergasted.

I’m at my wits end, can anyone suggest what I need to do next?

Thanks,

Steve


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Comments

Graham Bowcock

10:15 AM, 12th December 2023, About 6 months ago

Your first port of call is the lease. The management company cannot unilaterally change the terms to forbid something that you are permitted to do. This may impact on the value of your property.

Some leases do forbid letting, but you should have been told that when you bought it.

BRACKS Mead

10:37 AM, 12th December 2023, About 6 months ago

Agree with Graham above.

It must be explicitly prohibited in your lease.

EG The lack of any mention of rental restrictions in your lease, would mean you are allowed.

Steve Guest

10:41 AM, 12th December 2023, About 6 months ago

Yes, the lease does prohibit rentals , but the previous management company arranged a dispensation but it wasn't registered anywhere it would appear. Since I bought 20 years ago at least 20 flats have been privately rented. I'm fairly sure the owners don't know about this change, and might only find out when they come to sell.
As far as I can see it devalues the flats of owners and investors alike , because the develpoment attracts investors and owners don't get the chance to sell to investors.. I had one of mine for sale empty for 12 months with no takers and then I re-rented it an got an agreed sale , this buyer has pulled out because they have told him he can't rent

Easy rider

11:08 AM, 12th December 2023, About 6 months ago

Reply to the comment left by Steve Guest at 12/12/2023 - 10:41
In that case, you took the risk knowing that rentals were not allowed.

Market the property for owner occupancy only.

Darren Peters

11:33 AM, 12th December 2023, About 6 months ago

Reply to the comment left by Steve Guest at 12/12/2023 - 10:41
What exactly does the dispensation say?

Eg does it say the Freeholder will allow you to rent in perpetuity or for the next 10 years or something else?

Reluctant Landlord

11:50 AM, 12th December 2023, About 6 months ago

Reply to the comment left by Steve Guest at 12/12/2023 - 10:41
you need to chase up this 'dispensation' agreement pronto - otherwise you are not only in breach of the lease, but possibly your mortgage??

If you can't prove you can let the flat then you have to be honest and declare this to any potential buyers.

Steve Guest

12:10 PM, 12th December 2023, About 6 months ago

Reply to the comment left by Reluctant Landlord at 12/12/2023 - 11:50
The management company who hel this dispensation have ceased trading and foolishly I didn't get a copy. and yes I would be in breach of the lease , but I have been renting 3 flats here for more than 20 years ,surely the ne management company should have al least consulted with all the owners and
then told everyone of the decision.
They charged me for a sellers pack and still didn't tell me ,it was the buyers solicitor who found out

Kizzie

12:23 PM, 12th December 2023, About 6 months ago

Lease terms can be varied but requires consent by the Court and written informed consent by all the other leaseholders. Professional legal advice must be obtained.

Wendy

12:42 PM, 12th December 2023, About 6 months ago

Two things come to mind:

There may be a waiver created as you have been letting your flat for a very long time (as have others) and there is a legal term 'estoppel by convention' which is based on your continued performance of an activity over such a long time you may be able to argue you and all leaseholders may continue to do so AND
A management company must keep a record of all resolutions whereby decisions are made so that you can refer back to that decision. Many don't but they should, just because they have ceased trading there should be a record of this extremely important decision/resolution in their hand over to the new company.

David Smith

12:54 PM, 12th December 2023, About 6 months ago

Could you purchase the freehold or the other leaseholder under Collective Enfranchisement and apply a Deed Of Variation to allow Lettings?

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