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Subletting restriction in lease agreement


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We are about 2 weeks into the process of purchasing a 2 bed ex-council flat in Southfields as a BTL.


Our solicitors have hit a snag in that there is a clause in the lease agreement preventing the flat from being rented out and advised us not to proceed as a deed of variation can be lengthy and costly.


The estate agent was suprised (as they always are!) as they have sold many BTL ex-councils in the area, so they got on the phone to the council who have said they have no issues with us letting out the flat as long as we and the tenant adhere to the standard leasehoud Ts&Cs...and are willing to provide a letter stating as much.


The also quoted this : 


Schedule 6, Regulation 17(1) of the Landlord and Tenant Act 1985, states that:


“A provision of the lease, or of an agreement collateral to it, is void in so far as it purports to prohibit or restrict the assignment of the lease or the subletting, wholly or in part, of the dwelling house.”


Which from my understanding is saying that, that act from 1985 makes any letting restrictions in a lease null and void?


This is all good news I guess as we thought the purchase was doomed...however our solicitor is sticking to their guns and basically saying the mortgage lender won't proceed without a deed of variation as that act could be changed or pulled in the future. It sounds unlikely to me but I am not the expert...


I also find it odd that the mortgage lender would have an issue as it seems like this would be a common problem.


The agent says the council has indicated a deed of variation to delete the clause would take around 3 weeks and cost £450 which worst case scenario is not bad.


I just wanted to know if anyone else out there had hit this scenario and if so what steps they took?





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Skip it or you will have the same trouble down the the road as the seller and leases from LAs have a bad reputation for scarey major works bills.


I have seen leases preventing subletting to more than one household but never preventing it altogether, another thing to look out for is fees from managing agent to 'check' your tenancy agreements, they can be hundreds.

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Thanks for the response, we have now heard back from the council and they are happy to do a deed of variation and remove the clause as it is outdated. The costs is around £450 which the seller is going to pay, and then my solicitor is charging me £250 to handle it so not too bad and then it's done and dusted for the future.


As for major works, yes always a risk but theoretically they add value to the property and the searches should pick these up. We know of some upcoming works at the end of the year but built that into the offer we made so it's covered there I guess.

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