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When subletting consent is required but not sought, freeholders and their block managers can be left totally unaware that some of their BLT landlords may have handed over their flat(s) to the local authority in order for them to house the homeless (or those who are about to become so). Private landlords are often offered incentives under s25 of the Local Government Act 1988 such as the following:

  1. The authority paying the costs of leases;
  2. Making small one-off grants (“finders’ fees”) to landlords to encourage them to let dwellings to households owed a homelessness duty;
  3. Paying rent deposits or indemnities to make sure accommodation is secured for such households;
  4. Making one-off grant payments which would prevent an eviction;
  5. Discretionary Housing Payments (DHP) to give financial help to meet a shortage in a person’s eligible rent and the housing authority consider that the claimant is in need of further financial help. Such payments are governed by the Discretionary Housing Payment (Grant) Order 2001

Note: Whilst there is no limit set on the amount of financial help that can be provided, authorities are obliged to act reasonably and in accordance with their fiduciary duty to local tax and rent payers.

ABSENT FREEHOLDER

In our case, there had been no freeholder on our block for many years prior to us taking over so landlords pretty did what they liked. In the beginning we guessed councils were involved because of the rapid turnover of tenants and the continual dumping of household furnishings. When I asked my local council which flats were involved (whilst we went through the Right to Manage process) all they did was ask me why should any landlord have to tell anyone else who he/she was sub-letting to, private or otherwise? They also quoted Data Protection!

I later learned that other departments within the council could also be using the block such as the Housing Department Social Services Mental Health Team and the Learning Disabilities Team. I was unable to get a break down on this either because of ‘client led’ databases and again, Data Protection!

To make matters even more complicated, due to reciprocal arrangements between councils, if one of them is short of accommodation, they will ask other councils for help. So far, Newham, Redbridge, Tower Hamlets and Westminster have all used our East London block but its only due to being asked for help from the tenants who have problems in one area or another that I established this much.

I also discovered first hand that councils place enormous reliance on agents checking out the standards of the property before they place tenants in the PRS which certainly didn’t happen here.

It got even worse because by signing an extended lease with the council (often 3 or 5 year) such landlords will often be exempt from landlord licensing because they hand over management to the LA and are not named as landlords in later tenancy agreements. This position of landlord is assumed by the LA’s managing department or agent, with the LA being responsible for finding, vetting and placing tenants and dealing with any later issues.

MY EXPERIENCE

We haven’t been able to get any landlord to respond to the request for retrospective permission to sublet because we tried this when we eventually secured a managing agent. As a result of both landlords and local authorities keeping us out of the loop we got tenants placed on our block not only with drink, drugs and anti-social behaviour issues (and friends with similar issues) but they were housed with landlords who went way beyond the popular term of ‘rogue’.

We have had to deal with each situation as it arose and today the block is a much nicer place to live. Some of the landlords have sold up, the properties have been purchased by owner occupiers (our ratio of rented properties to owner-occupiers is now 17 to 5) and through working with tenants with PRS issues, a bond of trust has been formed and friendships made.

Our over-riding problem  is that our leases don’t contain a key clause which newer leases may contain, which is that of not sub-letting the whole of the flat to a Housing Association, Local Authority, or any other body whose objects include the provision of housing accommodation.

And before anyone suggests a lease variation to accommodate that, I really can’t see our BTL landlords supporting us in a change that would wipe out their income!

So we will simply have to keep our fingers crossed that things stay as they are but our first landlord and tenant nightmare can be read here.

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