Breach of head lease by owner of rental, possible conflict of interest in Lettings Agency - can any one offer any advice please?

[PropertyManagementCompanyQuery]

Hi, recent name change to not tie back to my usual username as I'm posting on behalf of a friend who is not on MN, looking for advice on a current situation.

My friend lives in a share of freehold flat, and has relatively recently become co- director of the freeholder's management company. One of the flats in the block is rented out. It looks likely recently it may be being used as a HMO. It is a 3 bedroom flat and it looks like the lounge is being used as a 4th bedroom.

The directors have been looking into this as some of the owner-occupied residents have raised concerns. The head lease on the flats states "not to use or occupy nor permit the flat to be used or occupied for any purpose whatsoever other than as a private residence in the occupation of a single family."

The owner of the property is elderly and her DS is the registered contact. He does not respond to any correspondence. The flat is rented out by a local independent Lettings Agency. They have a very poor reputation locally. My friend has contacted the owner of the company unsuccessfully and has spoken to the Lettings Manager. The Lettings Manager was not particularly interested.

The tenants' tenancy agreement is not with the landlord. It is with a Property Management Company, which it turns out is owned by the Lettings Manager of the company the landlord rents it out through. So, he works for the company the landlord rents it out through and then his company sublet it as individual rooms. This is in clear breach of the terms of the head lease.

So there are two questions really. Firstly, what is the definition of a "family" in this context, and if the Property Management Company are in breach of the terms of the head lease what can the directors do? Secondly, is there a conflict of interest in the Lettings Manager's company renting the property through the Lettings Agency he works for?

Any advice gratefully received!

Unless otherwise defined in the lease, the word "family" has its ordinary English meaning. It could be two or more generations of a family living together, but it cannot include unrelated individuals.

If there is a breach of the head lease, the tenant is responsible regardless of the involvement of a property management company. The freeholder may be able to terminate their lease and/or seek damages from them. The directors need proper legal advice.

I don't see a conflict of interest in what you describe. The Lettings Manager may be in breach of his employment contract with the lettings agency, but if the agency and the property management company are in common ownership, I doubt there is a problem.

I suggest contacting the Local Authority as there may be various Housing Act issues as well and it might add to your case against the 'other parties' involved.

The owners family need to get involved as potentially he could forfeit the lease

Contact the HMO licensing team at the local council. Also the planning department (sometimes they need planning permission for change of use ).

Just to clarify that the Lettings Manager/Property Management Company owner is an employee of the Lettings Agents so not a common ownership, but it seems this isn't a route to explore. The other avenues are. Thank you - your replies are appreciated and taken on board. I'll pass them on.

Sorry - edited to add @prh47bridge - the tenant in the context of the landlord's tenancy agreement will be the Property Management Company, is that how you understand it? And therefore the people that are living there are sub-letting from the tenant ie the Property Management Company?

The property management company’s name is on the tenancy agreements as they are acting as agents for the leaseholder. The freeholder (you) has only got rights to act against the leaseholder for allowing the property to be used in breach of lease.

Get a solicitor who can advise you in more detail than anyone on an anonymous message board can.