Leasehold property lease clause

[G1ABB]

Any idea how to interpret the following:

"To use and occupy the Flat solely and exclusively as a private dwelling and not to overload the same and not for the purposes of any business and not to allow any refuse or rubbish to remain thereon"

My question being, does this preclude renting out said property to a tenant. E.g it appears to only be available for use by the owner.

I should add it is a share of freehold.

Thanks

[singlecoil]

If you intend to rent the flat for profit then that's a business use and therefore precluded.

[G1ABB]

That's pretty much how I read it. The bit I'm struggling with is another clause which says:

Not to assign transfer sub-let or part with the possession of a part only of the demised premises as distinguished from the entirety thereof.

This implies sub-letting is possible but an individual flat cannot have more than one tenant on separate rental agreements. Alternatively it is just saying in a formal way that an individual flat cannot be broken up and sold off in parts which makes more sense in the context of the first clause I put above. Anyhow, I'm fully aware that there are eight flats in the block and most of them have been rented out for years, hence the confusion. Sadly, I think my lawyer might have been furloughed or I would have asked him.

[22s]

singlecoil said:

If you intend to rent the flat for profit then that's a business use and therefore precluded.

I'm not a solicitor, but I'm not sure that is correct.

The intention of that clause is (probably) to stop people running businesses from their flats where they have people constantly coming and going, produce loads of commercial waste, get tonnes of deliveries, and generally putting additional strain on the infrastructure.

I'm sure someone more qualified will come along shortly, but I would wait for your solicitor to get back in the office to confirm either way.

My conclusion (based on that clause in isolation) would be that you could rent the flat out without breaching the agreement.

[singlecoil]

22s said:

singlecoil said:

If you intend to rent the flat for profit then that's a business use and therefore precluded.

I'm not a solicitor, but I'm not sure that is correct.

The intention of that clause is (probably) to stop people running businesses from their flats where they have people constantly coming and going, produce loads of commercial waste, get tonnes of deliveries, and generally putting additional strain on the infrastructure.

I'm sure someone more qualified will come along shortly, but I would wait for your solicitor to get back in the office to confirm either way.

My conclusion (based on that clause in isolation) would be that you could rent the flat out without breaching the agreement.

I'm not sure that it is correct either, however I do know that the intention doesn't matter quite as much as the actual wording.

[surveyor]

Speak to your lawyer, but....

The not to allow business is a old fashioned clause, but still frequent. It's meant to stop people working from home - especially in noisy trades. If letting to on a residential let you are not using flat as a business, albeit letting the flat may be the business.

As for not to sublet or deal in parts. Entirely normal. Assuming that you are not trying to let individual rooms etc then I would not be concerned.

PS - better on Speed, Plod and LAW section.

[G1ABB]

Thanks surveyor, I will re-post.

[Castrol for a knave]

G1ABB said:

Any idea how to interpret the following:

"To use and occupy the Flat solely and exclusively as a private dwelling and not to overload the same and not for the purposes of any business and not to allow any refuse or rubbish to remain thereon"

My question being, does this preclude renting out said property to a tenant. E.g it appears to only be available for use by the owner.

I should add it is a share of freehold.

Thanks

I assume your lease extends to the flat, and not incorporated into any wider premises, such as a retail unit below?

If just the flat, then as Surveyor says, the no business clause is pretty standard and nothing to worry about. Aside from the alienation clause, sub-letting a flat is not generally considered a business.

Turning to the alienation, if this is a single use asset, say a 3 bed flat, then it prevents you from sub-letting a bedroom, but it reads to me that you can sub-let the whole. it might say you need landlord's consent, although this tends to be in commercial leases.

A good test is to ask yourself what was the intention of the parties at the time of drafting? I would say here, it was to prevent a private residence being used as business premises, and to be occupied under one lease by one party (which of course could be x people living there, but one lease).

[Muncher]

"To use and occupy the Flat solely and exclusively as a private dwelling and not to overload the same and not for the purposes of any business and not to allow any refuse or rubbish to remain thereon"

My question being, does this preclude renting out said property to a tenant. E.g it appears to only be available for use by the owner.

No - this is not what this clause is intended to do. That's not to say there may not be other provisions prohibiting that.

[Muncher]

G1ABB said:

That's pretty much how I read it. The bit I'm struggling with is another clause which says:

Not to assign transfer sub-let or part with the possession of a part only of the demised premises as distinguished from the entirety thereof.

This implies sub-letting is possible but an individual flat cannot have more than one tenant on separate rental agreements. Alternatively it is just saying in a formal way that an individual flat cannot be broken up and sold off in parts which makes more sense in the context of the first clause I put above. Anyhow, I'm fully aware that there are eight flats in the block and most of them have been rented out for years, hence the confusion. Sadly, I think my lawyer might have been furloughed or I would have asked him.

As you say, that clause only prohibits dealing with a part of the property, as distinct to the whole.

[skwdenyer]

Muncher said:

"To use and occupy the Flat solely and exclusively as a private dwelling and not to overload the same and not for the purposes of any business and not to allow any refuse or rubbish to remain thereon"

My question being, does this preclude renting out said property to a tenant. E.g it appears to only be available for use by the owner.

No - this is not what this clause is intended to do. That's not to say there may not be other provisions prohibiting that.

Note that if you let it out as an AirBnB or other form of "serviced accommodation" then it is likely you'd fall foul of this, since you would actually be running a business there akin to a hotel, even if only a single unit.

[dgmx5]

Search for Nemcova v Fairfield Rents, the leading authority on Airbnb use being a breach of the terms of a lease.

Use as a private residential dwelling allows for subletting (assuming there is no express prohibition elsewhere in the lease on subletting or that you must seek the landlord's consent first) on an assured shorthold tenancy as there is sufficient permanency in such a letting as opposed to Airbnb.

You can only ever advise in the context of seeing the whole lease, and not one provision, but I am afraid that on this occasion singlecoil's advice is carp regardless of what the rest of the lease says.

Edited by dgmx5 on Wednesday 8th April 11:14