Sublet Registration fees?

Are you talking about a leaseholder with a long lease letting out or a tenant under an AST?

For long leases, there will normally be a figure (which if the lease was granted many years ago will be a few pounds or, the more modern style, "a reasonable registration fee being not less than [£40] plus VAT".

My answer is based on an article that appeared a few years' ago on another Landlord site regarding: Sub-Letting Licenses: (SOLITAIRE) LIMITED Appellant and CHERRY LILIAN NORTON and other cases [2012]
Landlords of leasehold buy-to-let flats are often asked to pay a fee (sub-letting licence or registration fee) to the freeholder when seeking permission to sub-let their flat, and this fee is usually due each time a new tenancy is signed.
This is a “nice little earner” for the freeholder, but some freeholder landlords and their managing agents abuse this by charging buy-to-let landlords exorbitant fees.
However, a little known ruling, a binding ruling by the Upper Chamber (Lands Tribunal) in 2012 comes to these flat owner landlords’ rescue so to speak.
The ruling could be quoted in all correspondence where freeholders or their agents are demanding sub-letting fees of more than £40 plus VAT, which are not specified in the lease
UPPER TRIBUNAL (LANDS CHAMBER)
These fees charged by freeholders are an endless source of resentment between flat owners and freeholders, and in the scheme of things are small beer to the freeholder, but when the charges are excessive, that’s when people get really annoyed.
Now though, flat owners have this ruling on their side. The upper tier Land Tribunal has decreed that following four different cases brought before it, sub-letting fees should be limited to £40 plus VAT.
So, in practice, any flat owner billed with an amount in excess of this should simply offer up that amount and quote the ruling, which should mean that that will be the end of the matter.
These sub-letting fees vary quite a bit, but charges of £100 plus have been common up to this ruling, and indeed since.
The four appeal cases were brought by landlords to the Land Tribunal in February 2012 and they were heard together by George Bartlett, QC, president of the Upper Tribunal.
In all of these cases the leases made clear that the properties could not be rented out “without the prior written consent of the lessor and the management company, such consent not to be unreasonably withheld or delayed”.
The landlords had argued that preparing and registering the sub-letting agreement (licence) involved a considerable amount of work, but the tribunal was having none of this:
Mr Bartlett QC concluded:
“The appellants seek to justify the consent fee in terms that apply to all consents, and they do so by setting out a list of work that, it is claimed, their agents do. It looks to me to be a list of all the things that could conceivably be done in connection with the grant of consent rather than the things that would need to be done in a typical case or that were in fact done in the cases under consideration”
In all four cases the QC concluded: “that a fee greater than £40 plus VAT could not be justified, and I determine that this amount is payable.”

On a personal level, I have found charges vary according to the circumstances of the sublet, whether the application is done on line or by post etc. Each time I have challenged them and quoted this ruling. The person who wrote the article also says he took this up with XXX and they confirmed that they would accept £40 (although surprise, surprise, they would not provide either a receipt or a certificate to sub-let!!)
He suggests the use of the template response below if the matter proceeds and solicitors are involved:
“I am prepared to offer your clients the “reasonable” fee of £40 for registration and permission to sub-let based on the case of HOLDING AND MANAGEMENT (SOLITAIRE) LIMITED vs CHERRY LILIAN NORTON as heard in the Upper Chamber (Lands Tribunal) of January 2012. Please see this reference:
http://landschamber.decisions.tribunals.gov.uk//judgmentfiles/j823/LRX-33-34-76-102-2011.pdf
Should your client not wish to accept this offer then reference to the above will be the basis of our defence should your clients wish to take the matter to Court. We feel very strongly about this and have a direct access barrister lined up to fight this case for us on a conditional fee arrangement basis, i.e. “no win no fee”.
I look forward to your response.
It is worth a try!

One of my freeholders (London flat) charges me £150 for this privilege!

Sorry Amethyst, £40 is not necessarily the right figure. The figure has to be "reasonable". £40 in 2011/12 would be about £65 now. £150 is probably unreasonable £75 might not be.
The problem is that if you don't pay, there is a stalemate and when you want to sell or mortgage the property you may have to cough up in order to regularise the matter.

Ian, thank you for the comment but initially I would always give it a try at £40 and hope for the best! Challenge it yes, but in terms of not paying, I agree that is not a viable option.

If this is as a leaseholder renting out your property then look at your Lease. It may state what the fee to the freeholder/managing agents/solicitor is.

If silent then like to be able to charge what they like "within reason" anything from £80 - £500"

Reply to the comment left by Ian Narbeth at 05/08/2024 - 10:59It’s under AST. Previously the £40 reasonableness was held to be definitive but the case I’ve quoted meant the judgement was withheld on the basis that the tribunal could not advise on ‘ registration’ fees as they weren’t classed as administration fees . In which case, where is my right of appeal or reasonableness in law ? Many thanks for any advice/ experience .

Reply to the comment left by Murtee at 08/08/2024 - 10:12
Sorry, the Upper Tribunal decision does not and cannot establish that £40 is the definitive figure. This will change depending on circumstances and, as my post above refers, time and inflation.

@Judith - £80 is at the top end of reasonable. £500 would be outrageous. Another problem is that some freeholders charge per document. So a £50 fee for registering the transfer and a £50 fee for registering notice of a mortgage.

I appreciate the point made about the £40 and inflation etc but my problem is if they are reclassifying the fee as ‘ registration ‘ and the SIMARC case states that tribunals cannot rule on ‘ registration fees’ when a case is brought then is there any appeal process at all for people caught in this trap ?
Thanks in advance for any help here