Subletting agreements are there for a reason!

We inherited a series of owners who ignored sublease agreements because there was no owner/managing agent at the time they purchased. Even though they are now fully aware of the management/ownership structure, they continue to ignore our requests to obtain the permit retrospectively, leaving them in default of their lease. This includes a slum landlord with an anti-social, alcoholic tenant on-site, who has just been fined £8,000 for renting one of the worst houses our neighboring Newham council has ever seen! He has resisted every attempt we have made to get him to take care of his tenant, who now has no electricity and therefore no heat. Even though he was the author of his own misfortune by connecting the meter, his landlord is still happy to get his housing allowance paid.

Participation of local authorities

We also have the involvement of local authorities in the form of private sector leasing, where landlords who do not have permission to sublet hand over their properties to the council which also does not verify that they have permission to sublet. Then we found out that more than one authority can be involved in our block at any time because they have reciprocal agreements with each other when one of them runs out of accommodation!

Dangerous Situations

Because sublet agreements are still being ignored, we’re getting landlords which, frankly, is what landlord licenses would deal with in a way. We had a family rehoused by the council as an emergency due to the state that the landlord and his leasing agent had allowed the apartment into. This landlord also owned a number of other flats in the block that were ‘managed’ to a similar standard.

We have another one that did not think of placing a young mother with two small children in one of their flats that had a faulty gas meter. Smelling gas the first night she moved in, she called a gas company and they told her that if she had turned on a light, there would have been an explosion! Even using a mobile phone could have had the same result and the engineer was so horrified that the owner ended up in trouble with the gas company.

We have continually asked for proof that the flat is now safe, but no such information has been received and our requests are ignored. Our managing agent has said that if we want to push it further, we need to consult a lawyer!

WHAT CAN WE DO?

Terms

A landlord can put conditions before granting permission to sublet, but even so, these are not without risk, mainly for us. Such conditions must be enforceable and, under the law, reasonable. For example, requiring a deed of agreement that requires the tenant to comply with the conditions contained in the lease may not be a big problem. However, requiring a large security deposit from the sublessee in the event that they fail to meet those conditions would be considerably more difficult to justify, if anything, claiming damages against us because they are entitled to protect their legitimate interests.

Inspect and identify hazards

Since we were getting nowhere on the aforementioned landlords, I decided to try another route and asked my local council to inspect and identify hazards in their apartments under the Housing Act of 2004 (specifically HHSRS). They’ve attended one of them, so I’m looking forward to hearing their findings.

Industry Professionals

I have also contacted the Association of Residential Leasing Agents, the Association of Residential Management Agents, Housing Minister Grant Shapps and the Health and Safety Executive outlining my concerns regarding breaches of sublet agreements and the subsequent release risk to property and tenants. The only response came from the National Federation of Property Professionals, but all they did was refer me to the Leasing Advisory Service. This was very disappointing because, at the very least, I was looking for a comment on something that is not just a block management issue, but a PRS and rollover issue as well.

loss

The ultimate penalty for a freehold owner is to go for forfeiture of the lease. This is often sought in cases of non-payment of service charges and involves asking the LVT to determine that the terms of the lease have been breached. If we were to try to pursue it in the case of our slum landlord with the antisocial and alcoholic tenant, written/photographic evidence would be required, as well as witnesses who would be prepared to provide statements of sightings/nuisances etc.

However, here is our problem. The solicitor who provided that advice was charging £400 + vat to carry out an initial review, setting out all the options and dealing with the initial letter which would indicate confiscation would take place if the situation was not resolved. All additional work carried out would be charged at an hourly rate of £185 p/h + vat and out of pocket which would initially have to come out of service charges!

ABSTRACT

We haven’t had a single approach from anyone asking for permission to sublet, so we don’t even get a chance to set some conditions. While I don’t see a problem with the type of conditions we’d like to place, the type of owners we have on this block cannot be reasoned with, so how are we as freeholders supposed to protect our legitimate interests when are we virtually paralyzed in the first place?

I have yet to find someone who can give me a definitive answer!