Leaseholder Landlords and the Law

This is the 11th post in my 2017 Legal Update series.

In most landlord & tenant situations where the landlord is a freeholder it is comparatively simple. You have a landlord. And a tenant.

However, if the landlord is himself a tenant under a long lease, it gets a bit more complicated. You will also have:

• The freeholder, and often
• The freeholder’s management company

How does this work in practice?

The answer is, not always as anticipated. If you rent a property under a long lease you have to be aware that you cannot always deal with it as if you were the freeholder. You are bound by the terms of your lease.

For example, your lease may prohibit subletting the property to tenants!

So, before you buy a flat as an investment property you need to check carefully the terms of the lease.

There has been a case, for example where the lease had a clause saying

“To use the flat as a private dwelling for the lessee and his family and for no other purpose”

Which, the First Tier Tribunal held, meant it could not be rented out to tenants.

Another lease had the wording:

“Not to use the premises hereby demised or permit the same to be used for any purpose whatsoever other than as a single private dwelling house in the occupation of the Lessee and his family.”

Which had a similar effect.  So be careful about this.

Then, even if you are using it as your home, you may find, like Ms Nemcova did in another case at the First Tier Tribunal, that you can’t let it out for weekends on Airbnb, because of the wording of the clause in the lease.

The problem about all of these is that, ultimately, if you carry on doing the prohibited thing, your landlord can forfeit your lease. Not something you will want to happen.

A question of repairs

Then there are issues about who is responsible for repair work. And can a landlord be held liable by their tenant for things which are actually the responsibility of the freeholder?

This issue came to a head in the recent case of Edwards v. Kumarasamy.

The Court of Appeal in that case basically found that the landlord was responsible for repairs to the exterior of the property even if the landlord had not been given notice and the repair in question was down to the freeholder.

To the relief of landlords and agents everywhere this decision was reversed by the Supreme Court who more or less re-instated the rule that landlords have to have been given notice of repairs before they are liable if they don’t do them.

However, that is not to say that problems will not arise in the future. So, make sure you keep yourself informed.

Further information:

Our 2017 Conference Course featured a talk by housing barrister Robert Brown specifically on leaseholder landlords and he discussed in greater detail the issues I have outlined above.

If you sign up for the course you will also get his comprehensive notes which include information about other issues he did not have time to discuss – in particular on service charges.

You will find more information about the Conference Course here.  There is a discount voucher for Property118 readers which is pp118cc30 – apply this on the checkout page and it will reduce the payment by 30%.  Note however that the coupon will expire after 16th September.

There is also a certain amount of information on my Landlord Law site plus members can always ask me questions in the members forum.

You can find out more about Landlord Law here

On Monday, I will be looking at landlords repairing obligations.

To see all the articles in my series please Click Here

Tessa Shepperson is a specialist landlord & tenant lawyer and runs the popular Landlord Law online information service.

To see all the articles in my series please Click Here

The post Leaseholder Landlords and the Law appeared first on Property118.

View Full Article: Leaseholder Landlords and the Law