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Landlords in freehold ‘breach’ warning

Residential landlords who rent out properties classed as ’leasehold’ are being warned to take advice if they receive any threats of legal action from the freehold owner.

Helen Clutterbuck, solicitor in the Litigation team at Lancashire law firm Napthens, warns that she has recently advised the owners of a number of leasehold properties – where another party, often an investment company, owns the freehold – on potential breaches of the lease.

In these cases, the freeholder had started legal action in the Lands Tribunal, claiming that it was unlawful under the conditions of the lease for the property owner to sub-let their home, even though they had been doing so for some time with no issues.

Helen warns that a property can still be repossessed even where a long lease is in place – for instance 100 years or more.

Helen said: “If a threat of legal action is received, it is vital to get professional advice immediately. In some cases, where such legal advice has not been sought, the parties involved have agreed alternative terms such as rental increases which might not seem excessive at first glance but may be in the long-term.

“Many property owners assume that because they have a leasehold property with as many as 999 years on the lease, they can essentially do what they like to the property. This is often not the case, but we have seen many occasions when the freehold owners have begun legal action improperly.

“Property owners should also ensure all their registered title documents are up to date as this will mean they are informed of any potential legal action swiftly, enabling them to get help promptly.”