Portfolio owner with short lease on flats conversion?

Portfolio owner with short lease on flats conversion?

0:01 AM, 18th July 2023, About 10 months ago 4

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I am an avid reader of Property 118 and a large portfolio owner. I have owned a 3 bedroom flat for 23 years and I turned it into 3 separate units as soon as I completed the purchase.

I didn’t apply for planning permission. Although I feel I should be able to achieve an Established use certificate. The tenants have been paying Council Tax for 15 years.

My mortgage term ends in a year’s time. Plus my lease has only 63 years left.  I would like to carry on letting the units.

Do you know of anyone who could help with the certificate of established use? The lender would have to take on a property with a short lease and no planning. I had the HMO inspector visit the property and he said it is not an HMO.

Another question I have is, the house is above a shop with only my flat above it.  The shop owner owns the freehold. Is it possible to buy a share of the freehold?

Thanks,

Ralph


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Comments

Blodwyn

13:01 PM, 18th July 2023, About 10 months ago

Why not buy the freehold outright? Then rent the shop to the shopkeeper? You never know, he may be glad of the capital?
I can't comment on the planning issue, others will.

David Smith

13:44 PM, 18th July 2023, About 10 months ago

If the floor Sqm of the shop is 25% or more of the total area of the property then Collective Enfranchisement is not an option.

RCJ

13:55 PM, 18th July 2023, About 10 months ago

Its not a conventional HMO its more of a s257 HMO. If it is a flat and you have done the conversion you will need 10years evidence but depending on the size of each unit it will not be worth formalizing the conversion because a s257 HMO would be easier to finance than small units of say 25sm each. There is also the issue that if consent was not obtained from the freeholder, the freeholder could come after you for breach of lease.

Harlequin

9:11 AM, 19th July 2023, About 10 months ago

Reply to the comment left by RCJ at 18/07/2023 - 13:55
Without formalising the use it is a planning breach surely?
If your lender lent on a 3 bed flat then surely they are not going to be happy that it is now 3 separate units and you are also breaching your mortgage conditions - if I've understood things correctly.

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