Sublet fees – More than I charge for a lot more work!

by Readers Question

11:20 AM, 9th April 2018
About 6 months ago

Sublet fees – More than I charge for a lot more work!

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Sublet fees – More than I charge for a lot more work!

I know this isn’t a new topic, but I would just like an opinion on clauses being used to try and get £160 for new sublet and £60 for a renewal (I own a Property management company and its more than I charge landlords for a hell of a lot more work).

I have owned a flat since 2002 where on the purchase I got permission to sublet and its all been peaceful until now when they want me to list and pay for all the tenancies that I’ve had since owning the flat.

The clauses they refer to are these and the second clause I just find totally confusing.

– Not to underlet the flat or the parking space without the consent of the company.

– Upon every underletting of the flat and upon every assignment transfer thereof or charge thereon and upon the grant of probate or letters of administration affecting the term hereby granted and upon the devolution of any such term under any assent or other instrument or otherwise howsoever or by any order of the court within one month thereafter to give to the company notice in writing of such underletting assignment transfer charge grant assent or order with full particulars thereof and of the name quality and place or places of abode of such under lessee or underlesees or the person or persons in whom the term hereby granted shall have become vested or to whom it shall have become charged as aforesaid and to produce to the company every such document as aforesaid and to pay to the company 0.05% of the value of the transaction (but not less than fifteen pounds) together with vat on such sum for the registration of such notice

Do I just pay up? I know there have been cases that say that the fee should be around £40 but these are from a good few years ago so would they still be valid to quote?

Thank you

Mark



Comments

Neil Patterson

11:22 AM, 9th April 2018
About 6 months ago

Hi Mark,

I have tried reading that second clause a few times and my eyes just shut down with the gobbledygook!

Mark Lynham

11:36 AM, 9th April 2018
About 6 months ago

Reply to the comment left by Neil Patterson at 09/04/2018 - 11:22
Glad its not just me then!

LVW4

13:53 PM, 9th April 2018
About 6 months ago

I've had this 'demand' to list all past sublets, and did not respond. If they are asking, they don't know, and unless there is something specific in your lease saying you must comply with this specific demand i.e. long after the event and not "within one month thereafter", I can't see that you are obliged to tell them. Also, I would question where in the lease the term 'transaction' is defined e.g. where the lease states "...0.05% of the value of the transaction".

Ian Narbeth

15:02 PM, 9th April 2018
About 6 months ago

If the letting was for 12 months at £1000 per month the "value of the transaction" is, arguably, £12,000. 0.05% of £12,000 is £6.00. So the minimum £15 would apply. However, that just applies to giving notice of the transaction.

The trouble is that if you have had numerous sublettings since 2002 and have not applied for consent apart from the first one you are in breach of lease.

That said this case: http://landschamber.decisions.tribunals.gov.uk//Aspx/view.aspx?id=823 may be helpful. The Tribunal in 2012 said the fee should not exceed £40. You appear to be aware of that case.Allowing for inflation £50 might apply today.

I suggest you write giving them a copy of the latest tenancy and pay £50 plus the £15 registration fee. Send them a copy of the case. Say that you have rounded up to £50 and that you will challenge any higher fee.

Mark Lynham

9:15 AM, 11th April 2018
About 6 months ago

Reply to the comment left by Ian Narbeth at 09/04/2018 - 15:02
I've only had 2 tenancies, the first one was already in there when i purchased the flat and the current has been there for the last 8 years... i didnt apply again for consent because i didnt read it that i had to apply each time....

Their last comment in their letter is 'our client reserves the right to instruct external solicitors to recover the outstanding requirements'... so its whether i risk that actually happening over in effect what is a small amount ..... i just hate people like this as it reminds me of the West Brom case where people put their own interpretation on things....

Ian Narbeth

19:40 PM, 11th April 2018
About 6 months ago

It would seem that you only need to get consent for the one tenancy that has been there 8 years (I assume it was for 6-12 months and has rolled over as a periodic tenancy).

As you comment it's not much in the scheme of things and so it may just be easiest to pay the £160 and be done with it.

Mark Lynham

8:54 AM, 12th April 2018
About 6 months ago

Reply to the comment left by Ian Narbeth at 11/04/2018 - 19:40
I think you may be right Ian... one side of me wants to go legal but then the other side says is it really worth it.... i plan on selling it next year too as i've decided to sell my portfolio by one a year and my leaseholds are the first to go...

Badger

19:31 PM, 16th April 2018
About 6 months ago

This seems to be becoming more and more common just lately.

What is the name of the company behind your demand?

Mark Lynham

8:47 AM, 17th April 2018
About 6 months ago

E&M (Estates & Management) ..


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