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I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.
Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.
John, Nick et all, Unfortunately I'm still having trouble understanding the details so I'll try and rephrase your answers:Would it be fair to say that the 'original reasons' have been superseded by the AST and 2004 revision. Or put another way, although subletting was commonly not permitted, new precedents have since been set that override and void the original clauses? If correct then this would be relevant between landlord and tenants, seems plausible.What about issues of subletting between a landlord and their lender? (Probably more complex to answer so may be easier to discuss in person.)Thanks enormously to you both.
Thanks for that John. Depends on the wording of the individual contract, got it.Marcus
There is no law against sub-letting and indeed it is very common amongst commercial properties.
Remember that buy to let loans came about when Paragon and Arla came together in 1996 after the introduction of the Housing Act creation of Assured Shorthold Tenancies.
The lenders require (it will be a condition of their mortgage terms) that the property is let on an Assured Shorthold Tenancy of 6 or 12 months, with no-sub letting.
This provision is because, as John points out, the lender, in order to preserve the strength of their security, needs to make sure that they can recover possession.
Lender - Landlord have a mortgage contract which the lender has control and restricts to 6 month AST
Landlord lets to Tenant
If tenant sublets....
Tenant to Sub-Tenant -
the original lender has no control, or direct contractual remedy against Tenant/sub-tenant. What would happen for example if the tenant granted the sub-tenant a 999 year lease?
So, in short, sub-letting is not against the law, but it is likely to be a breach of your mortgage conditions- and should not be done.
National Property Group
By law there is a right to sub-let when more than 2 or 3 (?) months rent is paid in advance even if the contact says sub-letting is not allowed.
There is a gov website that explains the specific reference in the law. I saw it a year ago. Rather than dig around for it I think Glenn and Nick have provided a slightly more useful reply given the circumstances.
John CoreyFollow me on Twitter-> https://www.twitter.com/john_coreyhttps://www.ChelseaPrivateEquity.com/blogLondon RE meeting, 2nd Tuesday of the month -> meetup.com/real-estate-advice