Problems found after you bought · Lease restrictions on sale, mortgage or letting
When I bought this property, I didn’t know lease restrictions on selling, mortgaging or letting could hold up a sale or remortgage. Now I’m stuck.
Would you have bought the property if you had known?
If you had known what the lease restricted about selling, mortgaging or letting before you committed, and understood the problems this could cause when you later came to sell or remortgage, would it have changed your decision?
- Would you have paid the same price?
- Would you have wanted it investigated first?
- Would you have walked away?
If knowing about the problem might have changed what you did, the next question is obvious.
Did you receive the right advice when you bought?
You may not know the answer yet. But if nobody explained the problem, or you are now questioning what you were told at the time, that is worth looking at.
You don’t need to know whether anyone was at fault. Tell us what happened and when you bought. We’ll talk it through with you.
Why lease restrictions on sale, mortgage or letting can hold up a sale or remortgage
A lease does not only describe what you own. It also controls what you may do with it: sell it, mortgage it, let it out, or part with possession of any part of it. These provisions are often described as alienation provisions. They may appear together or in several clauses, schedules and definitions within the lease, and most owners have never read them.
The restrictions take several forms. Many leases prohibit dealing with part only of the flat at all. Assignment of the whole is often permitted but only on conditions: the rent and service charge paid up to date, the buyer entering into a deed of covenant, the buyer applying for membership of the management company, an address for service supplied. Some leases require the landlord’s consent, or a superior landlord’s, for particular kinds of sale. Subletting may be allowed but only on terms, or not at all. And some leases impose a qualification on who may own the flat.
What causes delay is that each requirement must be identified and dealt with at the correct stage. Prior consent or a licence to assign may be needed before completion; a deed of covenant may need to be executed as part of completion; notices of transfer or charge and some registration formalities are commonly dealt with afterwards. A restriction on the registered title may nevertheless prevent the buyer being registered until the required certificate or consent is produced. Requirements differ between leases, managing parties and lenders.
How the problem usually surfaces
You cannot deal with a physical part of the flat
The lease prohibits assigning, underletting or charging a physically defined part of the flat separately. That is not necessarily the same as transferring a share in the ownership of the whole flat.
Consent is needed, with conditions
Assignment is permitted only if the rent and service charge are clear, the buyer covenants directly with the landlord and applies for membership.
A restriction that bites near the end of the term
The lease bars assignment during the later years of the term without prior written consent, which arrives exactly when the term is already short.
Subletting is conditional, not free
You may sublet, but only as a single private residence, with the landlord or agent notified for each letting and a fee paid.
An age or occupancy qualification
Only someone meeting a stated qualification may own or occupy the flat, and a buyer has to complete a verification form and pay a fee.
A freehold interest or company share must move with the flat
The sale may require an associated share in the freehold, or a share or membership in the management or freehold company, to be transferred using the appropriate documents.
What if the landlord’s consent is needed to sell or sublet?
Where consent or a licence is required, establish who must give it and whether the covenant is absolute or permits the transaction with consent. Where the statutory duty applies, the landlord must deal with a written application within a reasonable time and give its decision in writing, specifying any conditions and giving reasons if consent is refused. There is no universal fixed timetable, and an absolute prohibition is different. Ask what information and fee are required and submit a complete written application promptly.
What you can do about it now
Read the alienation provisions before you market the property, not after you have a buyer. Ask your conveyancer what the lease says about assigning, subletting, charging and parting with possession, and what conditions attach to each.
Then sort the requirements by the stage at which each arises. Some must be dealt with before completion, such as a consent or licence to assign. Some happen at completion, such as a deed of covenant from the buyer or the transfer of a share. Others follow afterwards, including notices of transfer and charge and any registration formalities. Many depend on another party acting, so establish early who has to act, what they need and what they charge.
If you have let the flat, check whether you complied at the time. Where notification was required for each letting, or subletting limited to a single household, a buyer’s solicitor may ask, and a past breach is easier dealt with once known.
If you are selling, your conveyancer can ask the buyer’s solicitor what remains unresolved and whether it arises from the buyer’s lender’s requirements. If you are remortgaging, your conveyancer can check your proposed lender’s requirements directly.
What happened when you bought?
The lease, together with any supplemental deed, variation or relevant order then in effect, may have contained restrictions on assignment, charging, subletting or occupation when you bought. Those documents should ordinarily have been considered where available, but the present restriction is not necessarily identical to the position at purchase. The questions are what provisions applied then, what documents were reviewed, what was reported to you and whether any plans you disclosed, such as letting the flat or buying through a company, were checked against them.
Several records from the time may matter, and some may survive. The lease sets out the provisions themselves. Your report on title may show how they were described, and whether the letting and occupancy provisions were covered. If you told your conveyancer what you intended to do with the flat, your instructions or correspondence may show it. There may be a licence to assign, a deed of covenant or a verification form from your own purchase. The lender’s historical written instructions may also be difficult to recover, because they are revised regularly and superseded versions disappear from public view.
Was this property really mortgageable when you bought?
Getting a mortgage when you bought does not necessarily tell you how readily mortgageable the property was across the wider market. There are two historical questions worth asking.
What did your own lender’s written requirements say about lease restrictions on sale and letting when you bought? And what express requirements did other lenders have recorded at the same time?
Lenders’ written requirements were not necessarily uniform, and their wording changed over time. That means both which lender you used and when you bought can matter.
Lenders set out in writing what they expect a conveyancer to do about particular features of a property. Those instructions are revised regularly, and superseded versions drop out of public view, which can make a question as simple as what was my conveyancer told about lease restrictions in the year I bought? surprisingly difficult to answer from the sources available today. Lexsure has retained historical lender-specific conveyancing requirements since April 2007, so where the records permit they can help reconstruct what your lender’s requirements said at the time and how that compared with the wider lending market.
Across that period, 5 lenders in our covered archive population have had express requirements about lease restrictions on record, addressed across 4 separate places in their instructions. The earliest express appearance we can identify in the material we hold dates from 2019; the most recent recorded change of wording is 2024.
Two points of precision, because they matter. “Earliest identified” means the earliest express appearance in the material we hold, not the date any requirement began. And where our material for a particular lender and period is incomplete, that lender is left out of these figures rather than counted as having said nothing. We do not treat an incomplete record as showing that the lender had no requirement.
So, when did you buy?
Changing the year here doesn’t send us an enquiry or tell us who you are.
An example of the kind of wording in force 2017 to 2021
One lender’s requirements, not named, by way of illustration. Requirements were not uniform and this is not the wording that applied to your purchase — that depends on your lender and your completion date.
No lender handbook Part-2 (specific) requirements were published prior to 2019. But professionals were still under a duty of care on this topic. It is still worth speaking to us even if the purchase predates 2019.
If we find no express requirement for your lender
Where our material for your lender and period is complete, the answer may simply be that no express wording about lease restrictions appears in it. Where our material is incomplete, we treat that as a gap in what we hold, not as evidence that your lender said nothing.
Either way, the lender’s instructions are only one part of the record from the time.
The wider picture
Historical lender requirements can help us understand how mortgageable the property was when you bought. The conveyancing file and the advice given to you also matter.
Lexsure holds historical Report on Title material: the reports conveyancers sent to homebuyers, going back years. That material shows the kinds of alienation and letting issues that were being addressed when firms reported to buyers, and it is a second and separate record from what lenders required.
Whether the restrictions were explained
Were you told what the lease permitted and prohibited about selling, mortgaging, letting and parting with possession?
The requirements associated with a future sale
Were you told what requirements a future sale would involve, including which consents, covenants, notices, membership steps and fees arose before, at or after completion?
Whether letting limits were matched to your plans
If you indicated that you intended to let the flat, was that checked against what the lease actually allowed?
Any qualification on ownership
Where the lease restricted who could own or occupy the flat, were you told and was the position verified at the time?
Whether the effect on selling was explained
Were you told these provisions would govern your own sale, and could matter to a buyer and their lender?
These are examples of issues addressed in historical conveyancing material, not a checklist of what every purchaser should have been told. What mattered in an individual purchase depended on the circumstances and on what was known at the time.
So even if your mortgage completed, or there is nothing unusual in your lender’s historical requirements, it can still be worth talking to us about what happened.
Could this problem have been seen coming?
The relevant starting point is what was known, or could reasonably have been identified, when you bought.
What did the lease restrict? Were the conditions explained? What was in the conveyancing file? What were mortgage lenders requiring at the time? What kinds of alienation and letting issues were conveyancing firms addressing with homebuyers? And what were you actually told?
Taken together, that can help build a picture of whether the problem you are facing today was already something that should have been considered when you bought.
Did you receive the right advice?
What the historical evidence can tell us
Where the relevant lender and period are covered, we may be able to establish what that lender’s conveyancing requirements said when you bought, and how that compared with the wider record at the time.
- That does not by itself establish that anyone was negligent, or that you have a claim. Those questions need the original file and legal advice.
- The absence of express wording does not establish that the lender accepted the issue.
- What your conveyancer had to tell your lender and what they had to tell you are different questions, and the second depends on the retainer and the circumstances.
Time limits apply, and in some cases the date on which you first knew enough about the problem matters as well as the date you bought, which is why we ask about both. Our full methodology, including how we treat gaps in the record, is set out in the archive and its limits. Where a solicitor later needs formal historical evidence, Lexsure can provide source-evidenced historical lender information.
Sources and review
This page is about what a lease permits and prohibits when you come to sell, mortgage, let or part with possession. Where the company or agent whose consent or certificate is needed is the obstacle, see management company problems; where the arrears themselves are the issue, see service charges and major works; where the unexpired term is short, see short lease; where the lease lacks workable provisions altogether, see defective lease. If the restriction itself needs changing, see deed of variation. Guidance here about the present problem is general information. It is not legal advice about your property.
Where a lease permits assignment, underletting, charging or parting with possession with the landlord’s consent, the duties governing how a written application must be handled are those in section 1 of the Landlord and Tenant Act 1988. An absolute prohibition is different. This page describes the kinds of provision commonly found rather than setting out those duties, and it states no periods, fees or thresholds; the wording of your own lease governs, and the current position must be verified at each review. It states no lender requirement as a general rule, because requirements differ between lenders and change.
Historical lender information is drawn from Lexsure’s archive of lender-specific conveyancing requirements, maintained since April 2007. Figures on this page state the population they are drawn from.