Ten Reasons Why Your Property Might Need Permission:
1. Lenders Permission To Rent A Buy to Let Property – This inherently ostensibly comprises permission to let.
a. However, even this type of mortgage is likely to exclude certain tenancies.
b. E.g. it is likely that family members are excluded.
c. Certain tenant genres may also be excluded such as letting to students, asylum seekers, parolees, benefit recipients.
d. Therefore, it is important to always establish whether there is either implied or actual permission.
e. A former home may require a lender’s permission to let to renters.
f. Lenders are likely to require any tenancy to be an AST and contra wise may exclude common law and commercial tenancies.
g. Lenders Permission to allow Alterations and Extensions: If you want to build an extension to a property this is likely to require permission.
h. Some lenders might restrict the number of tenants to say four tenants.
i. So if you extend your four bed house to five bedrooms your lender might argue that your mortgage product does not permit renting to five tenants.
j. In such circumstances the borrower must do one of three things:
i. Swop mortgage products to enable the additional tenant. However, such a swop is likely to come with a lower loan-to-value and a higher interest rate.
ii. Switch mortgage lenders. This may not be as easy as it sounds in a depressed market or if the borrower no longer fits the lenders criteria if e.g. the borrower becomes: older, poorer, or with a poorer credit rating.
iii. The only remaining option might be to do nothing. Certainly do not waste money renovating if this will breach the terms of the mortgage agreement.
k. Lenders might require confirmation that borrowers have appropriate permissions before in turn permitting renovations.
2. Building Control Approval – Permission is likely required prior to conducting structural alterations.
a. Any structural alterations, even replacing a bathroom requires Part P permission to fit an electric shower unit.
3. Planning Permission - This may be required if outside Permitted Development. Large extension e.g.
a. If the Property is a listed building then again Planning Permission is required.
b. If the property is in a conservation Area again Planning Permission is required.
c. A house in a n area designated as covered by Article 4 requires planning permission under the Town and country Planning Act.
4. Ex Local Authority Homes - If the property was formerly owned by a local authority then there is likely to be a restrictive covenant in the deeds preventing alterations to the external appearance -without the local Council Estates Department’s permission.
5. Mandatory Licensable Property - A property is in England or Wales and comprising three or more storeys and 5 or more unrelated tenants is classed as a large HMO and as such requires LA approval to be let as a Mandatory Licensed Property.
6. Discretionary Licensable Properties – This also require permission to let and this covers Additional and Selective Licensing. See previous articles by the author on this topic.
7. Sui Generis - A property is in England or Wales and comprising seven or more unrelated tenants is classed as a large HMO and is in also a category of its own called ‘Sui Generis’ . As such this requires LA approval to rent regardless of the number of storeys.
8. An Empty Property also requires permission from any home insurer to let for longer than a set period of non occupancy – normally 30 days.
9. A Landlords Permission – This is required to do anything within a tenancy agreement which requires the landlord’s permission: permitting pets, subletting as an inferior landlord and or tenant, changing colour / decor, etc.
10. Permission to Act subject to Declaring Personal Interests. Failure to declare a personal interest can result in a breach of Consumer Protection Regulations. If there is a presumption of a personal interest this can create a conflict of interest. Once the personal interest is declared to the other party and that party agrees, or permits the act, then there is no conflict. E.g. a landlord must be told that a letting agent or staff member is related to the new tenant, or to a service provider, to avoid a presumption of impropriety. The tenant might only be paying half the true value of the rent or the contractor may not be competitive, both to the detriment of the landlord. Once informed the landlord is likely to scrutinise such a deal to ensure correctness before granting permission to rent to the relative or agree to works by the relative.