Buy share of freehold or gain permission to build extension?

hibzy

Hi all, 
I was hoping I could get some advice on here as I am having trouble understanding the ins and outs. 

I live in a masionette with one neighbour upstairs. I want to build a rear extension (3m x6m) and at first thought the easiest way to do this would be to buy the freehold with the neighbours as it was something we had discussed last year.
Anyway, once we asked them and took it seriously they have been quite awkward about it all as if we have some sort of ulterior motive. (We did explain that we want to extend)  it has been about 3 months since and they have been dragging it out. Anyway we decided to ask the freeholder for permission/license to alter instead and were moving forward with that but now have been told by the current freeholder that the neighbours are ready to buy or we can get permission and forget about the freehold. So we have the choice of two directions now. 
We have already reserved our builders and kitchen for April so we were hoping to start then. 

The questions are: 
1. Which way would be quicker? 
2. Will the neighbours be able to stop the extension if we purchase the share of freehold? 
3. I think the license to alter is required either way right?  Does anyone know the cost of this? 

Note: lease has 900+ years. 
Also another reason is because we would like to move things around internally later/ have more freedom in making changes. 

eddddy

Just to double check... presumably your extension will be on your garden. Is the garden demised to you in the lease? Or does it belong to the freeholder, but you are allowed to use it as a garden?

Also, have you got the relevant planning consents? (There's no permitted development rights for maisonettes.)

And what are the building maintenance/repair responsibilities in the existing leases?  Will the leases have to be varied to take account of the extension?

1. Which way would be quicker? 

That depends on the freeholder.

To give consent for the extension...

• the freeholder might want you to provide stuff like detailed plans, a surveyor's report, a structural engineer's report, the planning consent decision notice, etc.  Then the freeholder might want to get their own surveyor and structural engineer to check everything. Plus arrange a new lease plan, vary the maintenance responsibilities in the leases.

• Or the freeholder might just write you a letter effectively saying "Yes, that's OK"

To buy the freehold...

• Have all 3 parties (Freeholder and 2 leaseholders) agreed on the total price, and any other terms?
• Have the 2 leaseholders agreed how the price will be split between them?
• Have the 2 leaseholders decided whether to have a declaration of trust deed? (It might be sensible, for dealing with disputes. Especially as you'll be wanting consent for the extension.)
• Then it's a case of instructing solicitors.

2. Will the neighbours be able to stop the extension if we purchase the share of freehold? 

As joint freeholders they'll need to give consent - which can't be unreasonably refused. (See the comments above about getting freeholder consent for the extension)

3. I think the license to alter is required either way right?  Does anyone know the cost of this? 

• It will be the expenses (e.g. potentially 2 surveyors fees, 2 structural engineers fees, lawyers fees for varying leases and leaseplan etc) plus payment for the freeholder's time.

NameUnavailable

You could buy the freehold yourself if the neighbour isn't interested and the freeholder is happy to sell. If the neighbour has been a bit difficult about it so far I would suggest getting permission from the freeholder to extend now, once that's done consider buying the freehold (so the neighbour can't stick any spanners in the works) OR just buy the freehold yourself now.

princeofpounds

The license to alter would probably be quicker, but we have no idea. It totally depends on how the various parties behave through the processes.

To underline the point - yes as co-freeholders your neighbour could block your extension. It's true that consent should not be unreasonably withheld, but there is not a high bar of reasonableness for refusal in the case law. Noise and inconvenience of building doesn't cut it, but interfering with the building structure does. 

Yes, the license to alter is necessary either way for your extension to avoid breaching the terms of your lease. If you and your neighbour become freeholders, you can choose to award the license by scrawling on the back of a napkin if you both agree (not that I would recommend it), but if you're being professional you would probably keep some of the process (especially party wall surveys and similar technical costs).

The problem you have with your neighbour is that your interests are not aligned. You get your extension, and your neighbour gets... what? 9 months of building and disruption? A worse view? So if you are going to work with them, you need to really know what they are planning to do.

That's not to say your current freeholder's interests align with yours either. But if they think you and/or your neighbour are going to buy out the freehold, then they may be more inclined to approve a license to alter. They could charge some nice fees, and it would raise the value of your property, and hence the freehold if/when they do get bought out. But there's no guarantee they are thinking like this. And you can spend money on fees and surveys etc. only to have them refuse it.

You'll be very lucky if you get this whole process resolved by April. It was rather foolish to book things with zero permission. I suggest that you push the project back whilst you still can.