Rental restriction placed in title deeds

by Readers Question

13:10 PM, 10th February 2014
About 7 years ago

Rental restriction placed in title deeds

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Rental restriction placed in title deeds

In 2012, I bought my first house from Places for People – long story short, I am now looking to move in with my girlfriend to her house and rent my property out. Therein lies the problem. In my Title Deeds, Places for People have included a restriction that states that I may not rent my property out (you know, the house that I own…through my mortgage of course). I am aware that this is something I should’ve checked prior to purchasing the property however at the time, I bought the property (with my ex-gf) with a view to it being a long-term family home…no such luck!

Since September I have been trying to get this restriction removed from my Title Deeds. Having spoken to Places for People, they have agreed that I may rent my house out although I need to go through THEIR letting agents. This isn’t the end of the world, but I just annoyed that I am still bound to them! Rental restriction placed in title deeds

Today I have found out that they aren’t going to be removing the restriction from me Title Deeds but have provided me with a letter that states “In order to progress your application for a licence to sublet, I would be greatful if you would complete and return the attached form. this will then be considered in line with our policy, if your request is approved then there is a charge of £250.00 including VAT for the preparation of the licence that is required for you to sublet. If a licence to sublet is issued this will be for a period of 24 months with a need to be renewed after this time…”

The question I’m really asking, is a) how do hey get away with including those sort of restrictions in the Title Deeds of a property and b) are they within their rights charge me £250 bi-annually for a “licence” to rent my property? They have stated that as they are the beneficiary of the restrictive covenants, they grant a licence to “sublet or underlet” my property to ensure that any tenants I have abide by the restrictions set out in Title Deeds.

Any help or advice here would be very much appreciated!

Thanks

Dan



Comments

Mark Alexander

13:19 PM, 10th February 2014
About 7 years ago

Hi Dan

There are a number of legal issues to consider here.

First, did your solicitors advise you about the restrictions on the title deeds when you purchased the property? If not then you may well be able to make a professional negligence claim against your solicitors, possible even on a "no-win-no-fee" basis. For a FREE and confidential chat with our recommended direct access barrister please see >>> http://www.property118.com/member/?id=1945 and remember to mention that you are a Property118 member.

Second, a judge recently ruled that a "reasonable" fee for consent is £40 - see >>> http://www.leaseholdknowledge.com/sub-letting-fees-should-not-be-more-than-40-landlords-are-told-four-times-by-the-land-tribunal

Last but certainly not least, I suspect the OFT would take a very grave view of you not being given a free choice over which letting agency manages your property and I would recommend you to take this up with your local Trading Standards Office.
.

sam

13:47 PM, 10th February 2014
About 7 years ago

Restrictive practice ?
Judges dont like that but then how far do you want to go ? At what cost ?

Mark Alexander

13:51 PM, 10th February 2014
About 7 years ago

Reply to the comment left by "sam " at "10/02/2014 - 13:47":

Hi Sam

That's why I suggested talking to Trading standards. They may take this up on Dan'd behalf at no cost to him.
.

Daniel Ramsell

14:03 PM, 10th February 2014
About 7 years ago

Hi Mark/Sam,

Your advise is very much appreciated. I can't believe that a company is allowed to put such restrictions on properties that they don't own! I will definitely be speaking to Trading Standards and see what they say and I'm currently reading my way through the "reasonable fee" case that you suggested Mark.

What I am weary of however is that I start pushing back and Places for People decide "screw it, we just won't let you rent your house out as per your Title Deeds that you signed"! I don't have the paperwork in front of me however I believe my solicitor at the time did make me aware of the clause however as I mentioned in my sop story, my intention was never to have to rent my house out however my circumstances changed.

Mark Alexander

14:16 PM, 10th February 2014
About 7 years ago

Reply to the comment left by "Daniel Ramsell" at "10/02/2014 - 14:03":

Hi Dan

You've not mentioned taking a pop at your solicitors, why is that?

Did they advise you of the restrictive covenant at the time of purchase?

If not, go for them. The law is on your side!
.

Daniel Ramsell

14:22 PM, 10th February 2014
About 7 years ago

Reply to the comment left by "Mark Alexander" at "10/02/2014 - 14:16":

That's what I meant by "I don’t have the paperwork in front of me however I believe my solicitor at the time did make me aware of the clause" 🙂 Having gone through my email trail, it appears that this was brought to my attention but I can't confirm this as the paperwork is at home which I shall be checking this evening.

It may have been brought to my attention however at the time, it didn't seem like it would be an issue as the I bought the house for me to start a family in with my now ex-partner) so the fact that I wasn't able to rent it out was never an issue as that isn't the reason I bought the house in the first place. It is however a need now.

Mark Alexander

14:27 PM, 10th February 2014
About 7 years ago

Reply to the comment left by "Daniel Ramsell" at "10/02/2014 - 14:22":

Oops!

That will teach me not to read your reply carefully enough LOL.

Have you considered selling the property?
.

Daniel Ramsell

14:37 PM, 10th February 2014
About 7 years ago

Reply to the comment left by "Mark Alexander" at "10/02/2014 - 14:27":

Haha, no problem 😉 I have considered selling my property however I have a restriction on my mortgage which requires me to pay a penalty fee for paying off the mortgage within 3 years. My 3 years is up in May 2015 🙁 Also, as a fall-back option, should the new venture with my girlfriend go south, I then have a house to fall back on.

Also, with the house prices the way they are at the moment, It would really be a good idea for me to hold onto the property for another year at least. The price of my house has gone up by £21,000 in just under 2 years (according to Zoopla...taken with the tiniest pinches of salt).

Mark Alexander

14:44 PM, 10th February 2014
About 7 years ago

Reply to the comment left by "Daniel Ramsell" at "10/02/2014 - 14:37":

So why doesn't your girlfriend move in with you and rent her property?

Perhaps better still, if you have a spare room in each property, why not have the best of both worlds and both take in a lodger. You would each have up to £4,250 of extra tax free income. That's a few very nice holidays and you can choose which property to live in as it suits you 🙂

It's much easier to get rid of lodgers if they turn out to be a pain or bad payers too 🙂
.

Daniel Ramsell

14:50 PM, 10th February 2014
About 7 years ago

Reply to the comment left by "Mark Alexander" at "10/02/2014 - 14:44":

All scenarios we've looked at before trying to rent my place out 🙂 My girlfriend's house is within walking distance to the train station (she works in London) and paying for parking at the train station to stay at mine is unfortunately not an option.

Taking in a lodger at my place requires me to be able to rent my property out, which has brought me to this very website here in the first place 🙂 I'm unable to let my house partially or in whole due to the clause in my Title Deeds. As I'm living with my gf. it would mean having a lodger in my unoccupied house and if I've gone through the trouble of getting Places for People to allow me to let my property, I may as well let the whole property instead of having half of it stay empty.

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