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Permissions to let property

Before letting out a property you own, there are a number of steps you need to take. Failing to notify your mortgage lender, insurance provider or HMRC
that you are letting a property could lead to very serious consequences, including repossession of the property. You may also need planning permission if you are changing the use of the property.

>> Inform the freeholder

If you are a leaseholder then your lease or contract will contain a clause that you must get the freeholder’s permission to sub-let or part with possession. This permission may not be unreasonably withheld, but it is very important that you get the permission. If you let
the property out and then later seek permission you will have already breached your lease. This breach is what we call a ‘once and for all’ breach and your freeholder can take legal proceedings against you.

The freeholder’s permission will generally be a formality, although it is usual for the freeholder to make a small charge for granting  their permission. Refusal will only be given where it is reasonable. For instance, if there have been complaints about noise from former tenants this might be discussed and you might be required to satisfy the freeholder that you will be renting to responsible tenants. If the freeholder does refuse permission you should make sure you have read the lease and know what it says about  this, and then seek the freeholder’s reasons for his refusal. You may be able to satisfy his misgivings before you need to take further advice.

>> Inform the mortgage lender

You will need to check the terms of your mortgage. For many Buy to Let mortgages permission to rent the property may be automatic, but even in Buy to Let mortgages there may be conditions on the type of
let permissible e.g. ‘assured shorthold tenancies only’ [See section  2.1 for an explanation of assured shorthold tenancy] or a restriction on housing benefit tenants.

If you are unsure of the requirements, speak to your legal adviser assisting with the purchase. You will probably need special permission from the lender if
you want to rent the property out as ‘rooms’  or bedsits which might create a House in Multiple Occupation
[See section  4.1 Definition of an HMO]. If you purchase the property as an owner-occupier  on a standard mortgage for home owners, you will need to obtain permission to rent the property to tenants. The lender may increase the cost of the mortgage if they give permission to rent the property out.

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