how does one calculate the value of roof space?

japonicaf

The company that we set up to manage our converted Victorian house of five flats after we bought the freehold is having major problems with the guy who owns the top floor flat. He carried out all his major structural alterations over the past decade without permission from the Freehold company - in which each leaseholder has a share, and of which I am secretary - as required under the lease. He now wants to put his flat on the market, and as secretary of the company I have pointed out to him what he needs to do in terms of getting retrospective licences for the work. I guess he will also need to vary the lease floor plan? Under the lease the roof space is not demised to his flat, and yet he vaulted the roof over around half of his property. He has admitted this, and is now suggesting he either rebuild the ceiling he took down, or buy from the Freehold company just that volume of the roof space he opened up. He is proposing to pay for this part of the roof space what the cost of rebuilidng the ceiling he took down would be. The roof space cannot be developed as rooms because of planning restrictions in this conservation area (so he says - I haven't actually checked this). He argues that the roof space has no commercial value. But surely he has added considerably to the appeal and value of his flat, so the vaulting of the roof does have some commercial value. A neighbour who has dealt with such things in his Freehold/leaseholds house says the roof space is valuable, and that we should not sell it lightly.

My question 1) is what is a fair way of calculating the value of the roof space taking into account the value that vaulting the roof has added to the flat?
And 2) is it really posssible for the top floor flat to buy just a portion of the roof space? Surely the roof space is bought or sold in its entirely (writes a lay person!) He will need a variation on the lease. and 3) is it normally the case that when a top floor flat purchases roof space, repairs to the roof then become the responsibility of the top floor flat? I understand from some things I have read on the net that this is the case. He doesn't want this at all - says the roof is anyway in a poor condition.

He is saying to the Freehold Company that he does not wish us to resort to legal counsel in order not to get involved in lengthy and expensive correspondence that could affect the value of our flats. I am arguing that of course we need legal counsel, and probably advice from surveyors. This is not making me terribly popular. From what I understand as the fault is his for not getting our permission in the first place he is liable for legal and surveyor costs.

monty-doggy

I would start by getting a valuation done on the condition of the flat before the work was done, and what it's worth now. That should give you some idea.

If he wants to purchase the roof spaced imagine the responsibility of maintaining the roof would come with it.

It sounds to me like he wants his cake and eat it!

ValHaller

There is already a thread on this. https://forums.moneysavingexpert.com/discussion/4618121

OP, why start a new thread - you will just cause people to cover old ground. Plus if you stayed on your old thread, you would only have to update us with things that have moved on.

mark?_3

if the loft space can only be use for storage then calculate the useable square footage and go onto a storage companies website like Big Yellow and get a quote got taking a unit on for the length of his leasehold. That'll give you a fair market value you can use as the starting point on negotiations.

propertyman

Its quite simple

Valuation of the flat with the additonal space

less

Valuation of the flat as per the lease- irrespective of its condition

(minus if you are generous the reasonable cost of construction)


Yes he will need to vary the lease in order to sell as the buyers solicitor will see that he has no title to those areas and has altered the roof and other part of the building which are likely owned by the company, not him, and either way without consent.

You have them by the short and.....

He will be upset but in effect he hads taken and developed, for his use and enjoyment and profit, land which you all jointly own, and may well have interered with rights over those areas granted in the lease.


1 : appoint a solicitor to act for the company
2; appoint a local chartered valuations surveyor, not a local estate agent to
a value as above
AND
b revalue the building for insurance purposes ( nothing to do with the market values) to take acount of the new liveable area
c ensure the work was carried out properly with the normal consents

bear in mind that the lease will also need to be altered to relfect shares of expenses due to the increased living area and the adjustment to who is repsonsible for say roof windows etc.

he will be responsible for all reasonable costs.

japonicaf

The guy will not be able to build extra rooms in the loft space as there is not enough space and he is unable to raise the roof level due to planning restructions in the area. But opening up the roof does add considerably to the height of the previously pokey main room of the flat, and surely adds something to the value of the flat (though I could be wrong about this, or overestimating it). Now that he wants to sell the flat, and has admitted building into the Freehold's roof space, he at first offered only what it would cost him to rebuild the ceiling and restore flat to what it was; he estimates this at £1,500. We told him the difference in value with and without roof space should form a basis, and he then said the value should be the value of the flat without and without roof space at the time he opened his flat into the roof space without permission some 10 years ago. But a valuations surveyor I spoke to today said the value should be at today's prices.
And after all, if we refused to sell him the roof space and forced him to close up the ceiling again, we would be likely to be able to sell it to a future owner for quite a sum.

japonicaf

Five months on, and the guy who took the loft space that belongs to our freehold company (set up by the leaseholders when we bought the freehold) has now got from the council the retrospective licence on the alterations to his flat as regards complying with building regulations. He had to carry out various changes in his flat that they had requested.

He now wants to go ahead with seling his flat, and wants to buy the roof space that he opened up and added to his flat. It seems it cannot be used for additional rooms - but through opening up he must still have added to the value of the previously low-ceilinged pokey flat which was still much as it was in the 1950s. He took the space some years ago - we don't know exactly when, but well within the 12 years of limitation (by at least two or three years). We knew he was doing alterations, but he refused, despite requests by the secretary at the time, to get approval from our freehold company (in which he has a 20 per cent share). He behaved in an unpleasant and intimidating manner presumably to deter the fellow freeholders, who are also close neighbours in the house, from questioning him. We never had a proper look at the flat and what had been done.

Anyway, we now need to appoint a valuation surveyor. The freehold company assumed this would entail getting the space valued at its current market value in terms of the value added to his flat by giving it an attractive high vaulted space. This would normally be calculated by subtracing the value of the flat without the space from the value with it, then subracting his building etc costs in opening up the space, and agreeing a split say 50:50 between him and our freehold company. That's fair, no?

But he is saying we should use in the calculation the value of the space at the time he did the work! As I said, we don't know precisely when this was, and the fact is he didn't buy it, and has been seriously in violation of his lease all this time. Should a valuation surveyor be instructed by both sides, or only by the freeholder company? If the former, is there not a conflict of interest?

In my view given that he is in breach of his lease, he is behaving in a totally brazen way, and is in effect "trying it on" and trying to pay us as little as possible. This situation is stressful for the fellow leaseholders/freeholders - who are united in thier view of his behaviour. He knows that the alternative is to reinstate the ceiling - but seems to assume we wouldn't want this.

monty-doggy

I'd stand my ground. He is leaving at some point anyway.

This guy sounds like a right nob!

I wouldn't be doing any deals, I'd be demanding he either pay market value as it is today or put it back how it was.

If he wanted it at 10 years ago prices he should have declared and bought it 10 years ago.

Simple!

anselld

You seem to hold most of the cards which makes his aggressive negotiating stance rather foolish, so don't be intimidated.

I would say the freehold company instructs its valuation surveyor. The value difference must be at today's prices but obviously it should assume a raw starting condition rather than the finished article otherwise you are asking him to pay twice for the improvement works. ( or compare the two completed states and deduct conversion cost if that's easier)

It would probably still be appropriate for the freehold company to charge him for the valuation cost as it is he who wants the lease variation. Likewise any legal fees for the variation should be included in the negotiated settlement figure.

time2deal

I'd include the value of the additional rooms he could build, or even convert into a new flat. Planning rules change over time and in my conservation area gradually all the buildings are getting roof extensions - and they were routinely turned down 5 years ago. Now being approved.

Rather than use the 10 year old value, I'd say use the 10 years into the future value! Or put some restrictive clauses in so if it is developed then the right to do so must be purchased at substantial value from the freehold company.