Management Company won’t allow Periodic Tenancies?

Management Company won’t allow Periodic Tenancies?

9:14 AM, 21st December 2017, About 4 years ago 23

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I am the Leaseholder of a flat in a large, city-centre block – popular with mature students and young, single, professionals.

The management company are trying to force me to issue new AST’s every 6 months – presumably to bolster the fees they then charge.

The lease requires me:-
31.1 not to … part possession of part only of the property:
31.2 not sublet the whole of the property save that:
1) the grant of the assured shorthold tenancies for a duration of no more than 6 months are permitted without the consent of the landlord; and
2) the grant of assured shorthold tenancies for a duration of more than 6 months are permitted with the Landlords consent not to be unreasonably withheld or delayed

Based on this, I have assumed that I could let on a 6 month AST and then either renew with another 6 month AST, or rollover to a periodic tenancy – without requiring consent.

However, the management company have now said that a rolling contract would not be deemed as a valid AST – and that it must be on a signed period for 6 months or more.

I’m concerned that a new fixed period might be unsuitable for some tenants – also, I can’t actually force the tenant to sign the new AST. Is this reasonable/enforceable ? Does it mean that I would have to evict every tenant that said they wanted a new AST but then failed to actually sign it?

I believe that the management company are taking this approach so that they can milk the AST renewal fee ‘cash cow’ as much as possible…

The Lease has the following
32.2. within one month after the date of any and every subsequent assignment transfer mortgage charge underlease or tenancy agreement including any immediate or derivative underlease or tenancy Agreement of the Property assignment of such underlease or grant of probate or letters of administration order of court or other matter disposing of or affecting the Property or other devolution of or transfer of title to the same to give to the Landlord notice in writing of such disposition or devolution or transfer of title with full particulars thereof and in the case of an underlease (and if so required by the Landlord) a copy thereof for registration and retention by the Landlord and at the same time to pay to the Landlord such reasonable fees including value added tax for such registration (being not less than £65 plus VAT thereon) in respect of the registration of each such document or instrument so produced

In practice, they now charge “a not unreasonable” (sic) £90+VAT for each AST registration/retention – ie they expect me to pay them £108 every 6 months letting.

Does a rollover/periodic tenancy count as “an assured shorthold tenancy of not more than 6 months” (thus satisfying clause 31.2.1) ? If so, should it require registration/retention – and hence trigger the charge ?

I want to comply with the terms of the Lease – but I’m not sure that the management agent’s interpretation is reasonable, affordable or practical.

Does anyone have any advice or suggestions on resolving this ?

Thanks in advance for any help.
Dave



Comments

by silversurfer2017

9:51 AM, 22nd December 2017, About 4 years ago

https://www.lease-advice.org/faq/what-can-i-do-if-i-disagree-with-an-administration-charge/
The above link is to the relevant page on the LEASE website. You can apply to the FTT on a DIY basis - no need to get a solicitor involved. It will cost you just £100 to apply for a paper decision, £200 extra if you want a hearing, but IMO that would not be necessary in your case. The paperwork is easy to fill in - you will need to send off a copy of your lease and maybe a few other documents like service charge bills. Just ask the tribunal to determine the following :
1. A reasonable charge for granting an new AST tenancy.
2. Reasonableness that only 6 month AST's can be granted?
3. Is it within the management's discretion that it can completely disregard the validity of a periodic tenancy?

The Tribunal offices are very helpful to lay people and will help you fill in the form or answer any other queries you may have.
I hope this helps - I went to a tribunal hearing about 2 years ago with several other flat owners (without professional help) to challenge excessive charges on major items like ground maintenance. We all contributed to building up a strong case and a well laid out 'Scott Schedule' . All flat owners got a £700 refund and our ongoing management charges have been reduced.

by money manager

10:26 AM, 22nd December 2017, About 4 years ago

Reply to the comment left by David Price at 21/12/2017 - 15:32
Interesting.

From the excellent property118 website "All assured shorthold tenancies will continue, by virtue of a new ‘periodic’ tenancy which will come into place immediately the fixed term ends, under s5 of the Housing Act 1988. "

https://www.property118.com/tenancy-agreements-at-the-end-of-the-fixed-term/41326/

So, for the OP's purpose is it a "new" and therefore lease prohibited tenancy or is it a lease compliant continuation?

My view is that the legal right of occupancy continues in the absence of a S42 and therefore the "tenancy" is unbroken and it is only the terms of that continued tenancy that have changed? Therefore the OP can allow a post six month term periodic but not grant one at outset.

Meanwhile, how many angels can stand on the head of a pin?

by Ian Narbeth

13:23 PM, 22nd December 2017, About 4 years ago

Reply to the comment left by money manager at 22/12/2017 - 10:26
I have a bit of experience interpreting these alienation clauses and unless the clause wording is unusual I would be confident a court would NOT treat the periodic tenancy as a new tenancy for the purpose of this lease.

by money manager

0:45 AM, 23rd December 2017, About 4 years ago

Reply to the comment left by Ian Narbeth at 22/12/2017 - 13:23
Quite.

On a related but slightly different angle, Airbnb where lease "prohibits". Our RTM recently won a case to stop the practice on the basis of being lease prohibited. The lease does state that any underlease must be by an AST but nowhere does it stipulate a minimum term ergo in my opinion the only people who couldn't take a weekend AST backed break would be UK residents with a home somewhere else. The RTM is pushing the "AST must be a six month min term", I don't think they could enforce that if challenged.

by Puzzler

21:14 PM, 23rd December 2017, About 4 years ago

AST does not have to have a minimum term but are set at (minimum) 6 months because the courts generally will not grant possession prior to this. It also must be the occupant(s)' main home and be let to natural persons to be an AST, hence if this is in the lease then be aware that company lets or airbnb lets will be prohibited.

by Gary Dully

0:17 AM, 24th December 2017, About 4 years ago

How can your lease provider be allowed to affect your tenants statutory right of a periodic tenancy?

You cannot force your Tenant to sign a new tenancy, they already have a perfectly legal tenancy already in place.

They are chancing YOUR arm with that one. I would view that as an unfair term in your contract.

by Puzzler

9:14 AM, 24th December 2017, About 4 years ago

Reply to the comment left by Gary Dully at 24/12/2017 - 00:17
They can't change the tenancy but they can make a charge for subletting (in the sense of renting out the property by the flat owner, not by the tenant - which would almost certainly be prohibited) if it's in the lease. The question here is whether it is a reasonable charge and how to challenge it....

by money manager

15:47 PM, 24th December 2017, About 4 years ago

Reply to the comment left by Puzzler at 23/12/2017 - 21:14
"It also must be the occupant(s)' main home"....in the UK, you can have an AST if you have a main home overseas.

by money manager

16:02 PM, 24th December 2017, About 4 years ago

Re: "The Lease has the following
32.2. within one month after the date of any and every subsequent assignment transfer mortgage charge underlease or tenancy agreement including any immediate or derivative underlease or tenancy Agreement".

I'm not a lawyer but in respect of our own leases (for seperately leased car spaces actually in an apartment block) three different versions some of which have multiple errors including differently phrased rights and restrictions it became apparent that it is easy to misconstrue the meaning of commonly used words.

Out of discussions with the managing agent, RTM board and two solicitors my thought that the meaning of "tenant" and "tenancy" had to be very clearly read in the specific context of the part of a document in which it sat.

In some parts of the lease it was clear that "tenant" was NOT being extended beyond the tenant then holding the unexpired term of the lease which of course an AST "tenant" never does. Whether the meaning of "tenant" is sufficiently extended to justify what are effectively notice fees on taking over that unexpired term may be worth looking at.

by Shining Wit

18:03 PM, 28th December 2017, About 4 years ago

I think my next steps should be to try and get the management company to explain/justify why they do not consider the rollover contracts to be valid. I will also try to get them to justify the "reasonable-ness" of the £90 charge (when the lease states £65 and, on this matter, has no in-built indexation).
At the same time, I will press for a removal of the recently imposed"Annual Notice Of Subletting" fee (which isn't mentioned in the lease).

In the meantime, I'll dig further into the LEASE website, and collect evidence for a possible FTT application...

Thank-you to everyone who has taken the time to comment on this topic.

Regards
Dave


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