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Remus2004
Remus2004, Barrister
Category: Property Law
Satisfied Customers: 70698
Experience:  Over 5 years in practice.
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Hi, I have a shared ownership apartment, which I own to 70%.

Resolved Question:

Hi,
I have a shared ownership apartment, which I own to 70%. Im looking to travel for 6 month and would need to rent the property out. I understand that Im not allowed to, but what would be the legal consequences if I did so anyways?

Is there a fine? Anything else?

Thank you
Submitted: 3 years ago.
Category: Property Law
Expert:  Remus2004 replied 3 years ago.
Thank you for your question. My name is XXXXX XXXXX I will try to help with this.

Is this shared ownership with a housing association or similar please?

Is it noted in your lease that you are not allowed to sublet?
Customer: replied 3 years ago.

Hi Jo,


This is a shared ownership together with the local council, Fulham and Hammersmith. Im the majority owner with 69,73% and the council owns the rest.


 


Its clearly stated that Im not allowed to sublet.


 


I have asked the council directly, however they couldnt give me an answer on what would be the consequences of going ahead in either case.

Expert:  Remus2004 replied 3 years ago.
Thanks.

This is breach of your lease.

The landlord would be entitled to apply to court to end the lease although the court would probably say that was disproportionate to the breach.

It can be reported to your lender and is breach of mortgage conditions if your lender doesn’t agree.

It also means that if the subtenant doesn’t pay rent the tenancy is illegal and therefore unenforceable.

Can I clarify anything for you?

Jo
Customer: replied 3 years ago.

Hi Jo, thank you for your answer.


 


This information I do have, what I ask is what the penalties could potentially be from the Council (not the Landlord or lender as we have the permission from them to sublet the flat)


 


Could not see any contractual penalties from the and when I spoke to the council, they could not give me an answer either. Hence, what is the worst thing that can happen: I get fined? I have to sell my Shared ownership flat? Any penalties or other breaches of landlord regulations?


 


I am prepared to give the council 30% of the rent (proportion to their ownership) if that is what it takes.

Expert:  Remus2004 replied 3 years ago.
Who is the landlord that you have consent from? It would usually be co-owner.

Customer: replied 3 years ago.

I have the consent from the landlord and my mortgage lender, but since its a shared ownership apartment the council is the co-owner, owning 30% of the lease and they do not give a consent to let.


 


 

Expert:  Remus2004 replied 3 years ago.
The co-owner would usually be the landlord. Who is the landlord in this case?
Customer: replied 3 years ago.

The Landlord isnt the co owner, its the council of fulham and Hammersmith.

Expert:  Remus2004 replied 3 years ago.
Would it be possible to give me the information I asked for?

You said that you had consent of the landlord. Who is the landlord who has given consent?

You have said that the co-owner is the Local Authority.

You said “I have the consent from the landlord and my mortgage lender, but since its a shared ownership apartment the council is the co-owner, owning 30% of the lease and they do not give a consent to let.”

I need to know who that party is
Customer: replied 3 years ago.

HI,


 


As per above:


 


70% owned by me


30% owned by the Fulham and Hammersmith council (Under the shared ownership scheme: http://www.lbhf.gov.uk/Directory/Housing/Home_ownership/homepage.asp


 


The Landlord of the main lease is St George's PLC


 


I have consent to lend from St George's and from my Mortgage provider but I do not get it from LBHF.


 


Again, my question is what would the penalties for the "Breach of Lease" linked with not receiving the consent to let from LBHF?


 


Will they fine me? Will they cancel my lease and I will loose my 70% share? Something else?


 


Thank you


 


 


 

Expert:  Remus2004 replied 3 years ago.
Thanks.

That makes sense now.

There is a head lease from St Georges to the council and then subsequently, from the council to you.
It is nothing to do with St Georges.

It comes down purely to the council.

They cannot fine you.

Nor are they under any duty to tell you what action they will take.

There is an absolute prohibition in the lease (as always with shared ownership) on subletting and they are not even under any duty to reply to requests.

As I said earlier, legally, they can apply to court to foreclose on your lease and you would lose your 70% share.

However I did say that the court would probably say the remedy of you losing the lease would be disproportionate to the breach.

What would not help you if you went to court is the fact that you have already raised the issue and been told that you could not do it and then went ahead.

The fact that you have raised this issue now with the local authority means that they will be looking at the situation in all probability to ascertain whether you have sublet this or not.

Of course, there is nothing to stop you having someone house sitting provided you can prove that they are not the tenant and are living their free of charge.

It would normally only carry any weight if it was a relative and you can prove that it was a relative or you could prove that it was a friend of long-standing.

Even so, it is still risky and the local authority do tend to take a hard line with subletting of shared ownership.

You could write back to the council and tell them that you are going to have a friend or relative stay to look after the property while you are travelling for six months because you are concerned for its security and that you will not be taking any rent. Ask them to confirm that this is not classed as subletting for the purpose of the lease.

Can I clarify anything for you?

Jo
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