Question

Home Business

by | 27 Sep 2016

An applicant for our flat is a psychotherapist. He lives and works away from our city but wishes to use our flat as a pied a terre in our city, while he looks for a new main home and moves into that. He proposes to to see 5-6 clients per day at our flat for a maximum of two days a week.

Our headlease states that the flat must be used only as a single private residential flat and for no other purpose whatsoever. I have written to the freeholder to ask if they would give consent for such a home business.

There are 20 or more residential flats in the block and there is an office on the ground floor.

The applicant suggests that the freeholder of our block can’t unreasonably withhold (written) permission for us to issue him with an AST unless his business requires a change of mortgage, or would significantly increase wear and tear to the property or would cause a nuisance to the occupants of neighbouring properties.

  1. Is he correct, please?

  2. After buying his new home and moving in to that, if he continued to use our flat for the business but no longer stayed in it, would we be in trouble?

  3. Can you see any other pitfalls?

Thank you.

Answer

6 Comments

  1. guildy

    To being with, please see this article which I think answers all the questions (if you believe the business can reasonably be operated from a home).

    In respect of question 2, the primary use would always have to be for that of a home otherwise there could be a problem.

    • Danny

      Thanks very much indeed.

      I had read the article but couldn’t be sure whether our freeholder could refuse permission. It looks as though they can’t do so unreasonably.

      And the point about its always being a main residence raises the question in my mind: if any tenant takes any flat as a main residence, but later switches to another main residence, and keeps the landlord’s flat on, should landlord serve notice of eviction? Is it like any other breach of tenancy?

      • guildy

        As long as it wasn’t accepted by you and you took action (section 21 or breach of tenancy) I think it would be fine because they would be in breach of the tenancy. You are only bound by the breach if you do some action accepting their conduct (which could include ignoring it for a long period after becoming aware but not immediately).

        • Danny

          OK thanks. I get that.

          Have been looking on your web site for a definition of main residence and found the situation where tenant lives in work-town during week and goes back to main residence some weekends. You advise using a contractual tenancy, which I see can’t be used for a business. Does that include a home business?

          You mention some advantages to the contractual tenancy. Re security of tenure, is it more advantageous to the tenant than an AST? I’ve never used it before so would feel a bit wary of it.

          Also my headlease says no underletting save by means of a lease which contains same conditions as headlease (no prob there) or by means of an AST not exceeding 3 years, or “other such tenancy … as shall not afford any security of tenure beyond such term”. So it seems I am not bound to an AST but if I used a contractual tenancy, could I restrict it to 3 years?

          Where could I find a definition of main residence please? If a man is back and forth looking for a new main home to live in it could be difficult to quantify. But it would seem unlikely to me that our flat would at any stage be his main residence.

          Thanks awfully. You are a godsend.
          Susan

  2. guildy

    There aren’t any easy answers as to what defines a persons only or principal home. However, it is important when considering the home business tenancy that the primary purpose of the letting is that of a home and not the business.

    Where there is doubt and it’s hard to decide, always go with an AST because that gives the tenant the greatest security and the courts won’t scrutinise it the same. Even if the AST was wrong it wouldn’t be crucially important except when giving a possession notice when the situation can be reassessed in detail.

    It’s important to always use our application for accommodation to get as much information as possible and again if the tenant isn’t sure about the principal home question, they should select that it will be for their own additional security.

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