Permissions to Let Property

Any property owner with a mortgage or not a freeholder may need to secure the necessary permissions before letting the property.

If the owner is a leaseholder, the lease may contain a clause stating either that sub-letting is not permitted or that you must obtain the freeholder's permission before sub-letting. This is known as an absolute covenant and is sometimes present in developments, usually flats, where it was always intended that the dwellings there were for owner occupation only. In addition, some long leases may allow local rules to be created, which may only enable dwelling owners or their immediate family to occupy the dwelling. You should take legal advice on this point, ideally, before purchasing the place if you intend to rent it out.

You must get this permission because if the property is let without it (even if permission is sought later), the lease conditions will already have been breached. The freeholder can take legal proceedings against the leaseholder. It is also an offence for an agent to advertise a property to let without lawful authority (section 1 of the Accommodation Agencies Act 1953).

Suppose there is no absolute bar on the dwellings being rented out. In that case, the freeholder's permission will generally be a formality, and the freeholder cannot unreasonably withhold this permission, but they may make several enquiries. For instance, if there have been complaints about noise from former occupants, this might be discussed, and the leaseholder might be required to satisfy the freeholder that they have addressed the issue. It is usual for the freeholder to charge for granting their permission. If the freeholder does refuse permission, read the lease carefully to find out what the lease says about granting permission and then seek the freeholder's reasons for their refusal. It may be possible to address and satisfy any misgivings before there is a need to take further advice or make the threat of legal proceedings.

If there is a mortgage on the property, one of the terms of that agreement may be that the owner obtains the lender's permission before the property is let, even if only one room is being let. This is because the mortgage lender will be concerned about ensuring that nothing is done that may affect the value of the investment and the lender's ability to recover the loan made when the landlord purchased the property.

It is essential to check the terms of any mortgage. For some buy-to-let mortgages, permission to rent the property may be automatic. Still, even in buy-to-let mortgages, there may be conditions on the type of let permissible, e.g. 'occupation contacts only' or 'maximum six months fixed term'. If these requirements are not fully understood, seek advice from a solicitor - the one who assisted with the purchase should be able to help. If it is proposed to let the property as 'rooms' or bedsits which will create a House in Multiple Occupation (HMO), this must be clarified as special permission may need to be sought for this, and conditions may be imposed that will need to be met. In Wales, changing a family-let house to an HMO needs planning permission.

If you purchased the property for an owner-occupier on a standard mortgage for homeowners, then permission will need to be obtained to let the property. The lender may increase the mortgage cost or change its terms if authorisation to let the property is given. Usually, a lender will not object to one room in an owner-occupier's home being let to a lodger.