Obstructive tenants

[Trooper69]

Can a tenant wilfully obstruct the purchase of a Landlord's premises to try and buy the premises for themselves should the Landlord wish to sell, or is there a law against this?

[Beauj]

Answer in brief, No they cannot. Unless the tenant has it in a written agreement that the premises are his to rent for X many years to come.

Landlord would also have to give (Tenant) notice that he wishes to sell and has X months or weeks to find other accommodation. <Depends on where, NIreland & Scotland have slightly different laws regarding timings etc.

Bottom line - If the Tenant does not move on, Landlord can issue an eviction order and use bailiffs to remove them.

[Trooper69]

Thanks Beaj. I understand that under normal tenancy agreements where tenant pays Landlord regular rent. In my case does this ruling also apply to long term tenants with a 96 year lease and pay �50per annum Ground Rent ? I guess you've answered that in your first paragraph?

[buildersmate]

The tenant is in a strong position is that he has a contract entitling him to rent at a peppercorn rent for donkeys years. Nothing can change that, and it clearly reduces the market value of the property.
Only the tenant can decide to shorten that period, so one wonders what 'wilful obstruction' constitutes. Merely sitting there and saying 'I'm not budging pal, but if you want out, I'll offer to buy it for tuppenny-halfpenny' is not wilful obstruction.

[Beauj]

Trooper if you are the Tenant, you would be better seeking advice from CAB or a brief. The law could be more on your side in this matter.

As I said, Laws in England are different from Scotland etc, and also other issues will enter into the case, such as, how long you have been there i.e., 6 months + and also, if you are a student etc.

Furthermore, rules will alter from Housing Ass. to Council accommodation and if the property was rented as 'frunished'. Also, if the Landlord was intending to sell the property, did he/she offer you the chance of buying it?

Best to seek further advice were you can show all the facts to someone more quailified to give you 100% answer for your situation. All the best trooper in your plight!

[Barmaid]

I'd seek advice. Under the Leasehold Reform Act 1967, tenants of long leases (over 35 years) have the right to buy the freehold of the property (known as enfranchisement). It's quite a complicated bit of legislation though.

[Trooper69]

Beauj,

To answer your question, I am the Landlord and the long term tenants are threatening obstructive behaviour to sell my property to them and no one else so they say any new owner who acuires my property, they will make life difficult for in refusing any planning the new owner wishes to make.Added to that is the problem that the property is commercial and must have application for 'change of use' to residential.

[buildersmate]

So what is the planning issue they seem to think they can block - no doubt we can help with that too.
Obviously something to do with a change of use. Have you got a split property, part commercial, part residential? - and they seem to think they can influence a CoU on the commercial bit? - I doubt that - nothing to do with their residential bit unless you are seriously going for a chippie in there, in place of the existing commercial use.

[cassa333]

Are they tenants in the normal sence or do they have a morgage on a leasehold basis?

For them to have a 96 yr lease implies, to me at least, that this is the case and they are looking to purchase the leasehold??

If this is the case then there is something that can 'force' a landlord to sell the leasehold to the tenants but |I don't know the ins and outs of it.

Or I could have got hold of the wrong end of the stick altogether.

[Trooper69]

Nobody has got a handle on this quite simple question . I'll try again: I am a freeholder of a commercial propertty ie an office .Above me are sitting tenants who I have inherited when I bought the office. They are not normal tenants in the true sense of the word in that they have possession of their flat on a 99 year lease. The only RENT they pay is �50 a year GROUND RENT. To all intents and purposes they are as such a separate entity with a different address. I am No.18. They are No.18a. Ok. so far ? I want to sell my office as flats because I'll get more money for residential use. For that I need planning permission and what is called "change of use" within the industry to change my office which is classified as commercial property into residential property which simply means as well as planning permission for the flats I want to build, I first must apply to the Council for this "change of use" before they can even consider planning permission for the flats. The tenants, expressed a desire in buying my office but came up against a stone wall because the lender, the HSBC ,told them they cannot have a mortgage for their intentions to possess and turn my office into a residency until they apply to the Council as described above ie. change of use and subsequent planning permission for the flats they want the office turned into. Because they can't get a mortgage, the onus is on me to find someone willing to go through the above processes to turn the office into flats. My tenants want the office badly and have told me they will oppose anyone else buying the property who may offer more money to me by being obstructive as possible in any planning the new owner wishes to make as they have a say in what they will permit the new owner to do in constructing flats around them. I am simply asking have they got a right to interfere and obstruct anyone from building flats beside and around them?

[cassa333]

They have every right to be as obstructive, within the boundries of the law, as they wish.

It would appear from what you say that some of us have got a handle on this.

[cassa333]

Sorry couldn't finish. Had to pick small people up from school...

From your discription they are morgaged (possibly) leaseholders of flats which are above commercial premises, you own the leasehold to the commercial premises and the flats?. Hence the ground rent they pay you. If this is not the case who do they pay 'normal' rent to?

If this is the case then as long as a % of the leaseholders agree they can as already stated 'force' a sale under the Leasehold Reform Act 1967 or at least get first refusal.

This is what you appear to be discribing. If it isn't then please explain where it isn't right.

If they couldn't get morgages on the commercial premises on a conversion basis then if I were them would try to buy it as a commercial entity and go for change of use later.

Why don't you want to sell to them anyway?

[Beauj]

cassa is right. I take it that you (Trooper69) don't want to sell to them because a. they can't get a morage & b. you would get more should you obtain 'change of use' & develop into flats?

As you say, you had to take these 'tenants' on, when you bought the office space, they do not pay rent per se, just the annual ground rent, therefore, technically, are they simply 'Caretakers' as opposed to actual 'tenants'? Maybe if that is the case you would have more joy in moving them on! Good luck.

[Trooper69]

I am the freeholder. They actually have made an offer, Cassa, as they need me for the conversion plans.As owner, I am the one who has to apply for such permissions. Anyway, their offer is that they will bear the costs of all bureaucratic planning permissions, change of use etc. which apparently costs around �10K with an exclusivity agreement of 1st refusal for �140.000. If they cannot raise the mortgage, I will be free to sell the new converted residential property on the open market. My solicitor has advised me to insist on a non-refundable deposit in exchange for the exclusivity clause which they won't agree to. Also, I have thought that I need to impose a time limit the premises be on the open market if they cannot raise the mortgage. Otherwise, I would own converted premises I used to work out of waiting indefiniitely to be purchased while they chase all around the city trying to raise a mortgage which they have already been refused once, but they say that's because the property is commercial at present. The three tenants argue once convsersion has been achieved, it will be a lot easier for them to raise a mortgage on residential property. Problems for me are on paper it looks good but I will no longer have an office to work to obtain income from and it is by no means guaranteed that planning permission will be granted anyway. Do you see what I mean ? Its very hit and miss and I am worried they refuse the deposit clause because they haven't got the money.My solicitor says its standard practice to have such a clause if they want exclusivity. I was hoping that someone on Answer Bank would say any unreasonable and obstuctive behaviour constitutes grounds for eviction so I'll have completely vacant possession and fetch much more money. I've tried a couple of Estate Agents who won't touch it once they hear I have tenants. Kind regards 69 Trooper

[cassa333]

In that case get the conversion plans etc done yourself and give them first refusal with a time limit.

A none returnable deposit is standard practice in LAND sales but I'm not so sure it is on residential/commercial property.

I am a little confused about why you don't just go for the change of use and planning yourself. Depending on your area the LA may try to help push it through if they need to hit their quotas!!

If you need the income from the commercial property before it is sold then surely you are a bit scuppered anyway!

They are offering to pay for the legalities and to buy so you might as well go for it , with a time limit. As for a none refundable deposit well, my oppinion of it would be you will be getting that in the form of the �10,000 fees they will be paying.

It is worth going with their plans simply for an easier life. Also IF they are unable to get the morgage later they will be less inclined to be difficult about another buyer as they would have had a fair wack at the job.

Basicly give them a chance. You may find it works out well. If not you will have gained �10,000 in the form of planning fees and will still be able to sell.

[buildersmate]

My turn now, I reckon. I did correctly guess that you were trying to get CoU from one Commercial Use to something else - I guessed to another type of Commercial use - perhaps that's why I only merited 2 stars?
I think you will find that the CoU to Residential IS the same Planning Permission you need. If Development Control approve your application, the principle is established that you can have X flats there. You would have to draw up the outline arrangements, but not all the internal layouts.
Having got that, you then need Building Control approval for the detail of how you will get the flats constructed, including insulation for heat and noise, etc. This requires far more in the way of drawings, but it isn't a consultation that others can object to - it is simple process of making technical building standards on the conversion.
I don't know where you get the idea that PP costs �10k. The cost for drawings might be �1k, and the statutory PP fee is �330 for the application for a CoU of a single building into two or more flats.
I don't see that this upstairs flat on a long lease changes much. They can object to your planning application the same way as many neighbours do - folks just don't like change. However for their objections to have any weight / worth, it must be on Planning grounds of severe impact on them - not 'we don't want this bloke getting PP because it screws up our efforts to buy it off him on the cheap'.
I'm sure you get my drift.

[Trooper69]

I think Beauj got it from the beginning and Cassa has just twigged with my further explanations. But Buildesmate, I've heard from more than one source as well as the tenants themselves permissions will cost between �5K -�10K.. I know for a fact residential properties in my road have gone for a lot more than �140K, but they have obviously been finished, furnished properties. I just hate the fact that they effectively have got one over on me. I suppose in the end is refuse to sell and carry on working. �140K might seem a lot, but after deduction of capital gains tax, a potential �30K income tax for the remainder of this year and the next plus other debts I have, I don't think I will be left with much. Cruel as it may seem, especially as it is only one of the three tenants who is causing all these obstacles, the ideal answer would be vacant possession and evict these guys. Then the sky's the limit.It sounds harsh, but in the present climate I have to look at maximising gains from my own property which I have had for 23 years. If it means evicting these guys then so be it. Am I being unreasonable ?

[buildersmate]

Ah, OK. You are probably talking about S106 Agreements. They work like this. In exchange for granting your PP, local authority requires you to enter into a binding agreement that you will handover some readies to the LA for 'infrastructure'. The logic is that it is your contribution to the schools, library facilities, ad nuisium that having extra people living in the borough will create. You don't pay any of this upfront - only if the proposed permission is going to be granted.
It didn't used to be like this - it is a new money-raising scheme by councils to offset part of the financial planning gain created by you enhancing the value of your property by seeking new PP rights. Enquire at your council what the rate is in your area - it varies a lot. Google S106 or Section 106 Agreements if that isn't adequate.

[cassa333]

On what grounds can you evict someone with a 93 year lease?

[jackthehat]

Trooper69 - I have today submitted plans to MY Local Authority for a client to have a CoU in circumstances reasonably similar to those in which you find yourself.
1. The Statutory Planning Fee for a CoU is � 330.
2.The Statutory Fees for the Building Regulations will cost my Client � 420 ish.
3. My Fees will be somewhere in the region of �900.

If you are willing to pay between �5,000 and �10,000 for these services................I'll send you my e-mail and we can talk privately...........:o)

[Trooper69]

Yes, I wouldn't dispute you at all jack. Which encourages my intention of not giving in to these guys. This is going back to my original question whether the grounds of unreasonable behaviour on behalf of these tenants is not grounds for eviction. Because of their long term habitation, I tend to agree with Beauj.There's little I can do. Just forgetting the monetary aspect for a moment, the fact that they have proven ill-faith in not agreeing to a non-refundable deposit and not replying to my concerns of a time limit if the newly built residency is put on the open market , makes me very suspicious. Cassa argues they may have paid for the non refundable deposit in bearing the burden of costs, but that is really not the issue. Had they come up with more money even to show good faith, they would not have lost that extra money as it would have been included in the original cost of the new building. These facts together with their threat of obstructing anyone else having an interest in developing the property, to me is nearly criminal.