Letting Property - Things to Consider
13th September 2019
13th September 2019
All flats and some freehold property (particularly those on managed estates) are subject to covenants affecting how the property is to be used and setting other rules in relation to, for example, if, when and to whom the property might be let. It is most important therefore for Property Owners and their Agents to consider those requirements prior to letting to ensure that all obligations are complied with and thus avoid disputes. It is equally important for Block Landlords/Development Owners/Managers and their Managing Agents to be familiar with any restrictions on, and obligations affecting, the letting of units within a development.
This is a brief guide as to the matters to be considered when permitting the letting of a residential unit.
Where to look
The starting point is always the Lease or, in the case of freehold property, the Transfer.
What to look for
In our experience the covenants placing restrictions on or imposing obligations for Property Owners intent on letting might include all or some of the following:-
A prohibition on letting of part only or taking in lodgers or paying guests
This will prevent the letting of rooms within, as distinct from the whole, property.
It will also prevent the letting of the property separately to its garage or parking space where the same is demised under a single Lease or Transfer.
A prohibition on letting of the whole
A less common provision, but one that does appear from time to time, which will simply mean that the property cannot be let.
Check the user covenant
Most Leases/Transfers will restrict the type of use a property is put to. For instance this may include a prohibition on the running of a business from the property or limit the occupiers to the members of a single family as distinct from, say, a group of individuals sharing;
More recently “user covenants” have been relied upon to prevent Owners or Tenants letting the property on short term lets - see our update “Airbnb Lettings - Permitted or Not?” from May 2018 regarding the decision in Nemcova v Fairfield Rents Ltd .
A requirement for licence to sub-let
Where such a provision exists licence must be obtained from the relevant party, usually the Landlord or Management Company. The requirement will generally precede the letting, so do make sure that provision is made to obtain licence before the Tenants are due to go in.
The requirement may also need the prospective Tenant to provide references or that the Landlord’s/Management Company’s costs are paid prior to the grant of the licence.
A requirement for entry into a deed of covenant
A rare but not unheard of requirement may exist for the Tenant to enter into a direct covenant with the Landlord or Management Company.
This requirement will generally always include provision for the Property Owner to pay the Landlord’s or Management Company’s costs for producing the deed.
Notice of sub-letting
Almost all Leases and some Transfers will include a requirement for the Property Owner to serve notice on the Landlord/Development Manager whenever the property is let.
The notice is often required to be accompanied by a copy of the tenancy agreement, a deed of covenant if one is required (see above), and a fee for registration of the notice served.
Usually the requirement is to do this within 21 or 28 days or one calendar month.
Many Leases, and we have also seen some Transfers on high end managed estates, will prohibit the keeping of pets or other animals in the property. In some cases the prohibition might be qualified by conditions either requiring prior licence to keep the pet.
It is common, particularly on managed developments, to see strict parking regulations both in relation to parking spaces relating to the property itself but also those other spaces allocated to visitors or general use.
Also common is a prohibition on certain types of vehicles entering or being kept on the development. Vans, caravans, motor homes, boats, trailers and various other vehicles that naturally fall outside of what you would describe as the family car or motor bike are often prohibited from a development.
Another favourite is a prohibition on parking on the roadway of the development.
Whilst it is hoped that the Tenant will not start knocking down walls etc. restrictions on alterations will include matters such as the erection of a satellite dish by the Tenant.
We are often instructed for clients in relation to breaches of any combination of the above types of clauses and all too often it is as a result of the conduct of either an innocent and entirely unaware Tenant, or one who simply does not feel that the rules of the property apply to them. Either way it will be the Property Owner who faces the claim from the Development Owner or Manager and the resulting costs from that action. The best way forward is to be fully aware of the specific restrictions that apply to the property and the development, before letting and ensuring that the Letting Agent is fully informed of those from the start and takes account of them when finding a Tenant.
For more information, please contact Kevin Lever, Solicitor, on 01435 897297 or email@example.com.
This legal update is provided free of charge for information purposes only; it does not constitute legal advice and should not be relied on as such. No responsibility for the accuracy and/or correctness of the information and commentary set out in the article, or for any consequences of relying on it, is assumed or accepted by any member of KDL Law or by KDL Law as a whole.
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