Unreasonable freeholder?(4 Posts)
DH and I are FTBs and have had an offer accepted on a two bedroom flat. It comprises the bottom two floors of a house, with one top floor flat above ours which is owned and lived in by the freeholder of the whole property (we are buying on a leasehold basis).
Our solicitor has advised that there is a term in the lease which (a) prohibits any owner of our flat from letting it to more than two adults (despite the fact it is a two double bedroom flat), meaning that it would be incredibly unattractive to the buy to let market if we then went on to sell it at a later stage (therefore limiting potential purchasers), and (b) gives the freeholders seemingly unfettered discretion to object to any tenants of our flat should it be rented out (even if there is no legal basis for them to do so). Our solicitor has strongly advised that we try to meet/speak to the freeholders (our potential new neighbours) to try to figure out if they are reasonable and rational people (ie is this clause likely to cause us major problems down the track). There is no such clause in relation to their flat.
It's all making us a bit nervous to be honest - even if we do meet them and think they seem rational, there are no guarantees that this is in fact the case!! They apparently won't agree to remove the clause as they want to have a degree of control in respect of who lives under them (noise etc).
Has anyone come across any clauses like this before? Were they dealbreakers or is there a way around them? Really don't want to pull the plug on this property but also very nervous about the degree of influence the freeholder has.
Clauses such as you describe are quite common and, as you rightly say, could be unattractive to the buy-to-let investor. Having said that, the clause allows for the flat to be let (and some prohibit sub-letting at all) to two adults so there is a small compromise. I think you have to decide whether the ability to sub-let in the future is a deal-breaker for you. Unfortunately, the freeholder can have clauses in the lease such as this - that's why anyone considering a leasehold property should go through the terms and conditions very carefully. Your solicitor is advising you that there is this clause, it's up to you to make the decision to proceed or not.
I'm a conveyancing assistant and have to say I would not buy a leasehold property (and neither would most of my colleagues) but, unfortunately with areas such as London and/or budgets, it is sometimes the only way some people can get on the housing ladder.
Thanks Spickle, that's really useful. DH and I are very new to the property game (as you can probably tell!) so it's great to get some knowledgeable views
Somebody else could buy the freehold at any time. They might turn awkward so they could buy "your" flat cheap, or hold you to ransom for consent.
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