Freeholder's permission for leaseholder to make a loft conversion

daknin21

Hi all,
My wife and I are freeholders of a 2-floor maisonette in London. We live on the ground floor and the neighbours on the first floor are leaseholders.
The leaseholders have notified us that they want to make a loft conversion but need our permission first.
Their lease states that they cannot "make any structural alterations in the upper maisonette without the approval in writing of the landlord to the plans and specification thereof such approval not to be unreasonably withheld."
1) What does "unreasonable" mean in this context? What sort of reasons can be invoked by us (the freeholders) to not give approval?
Their lease also states that "the landlord demises unto the tenant (...) the roof of the property and the rafters and beams supporting the same and the gutters and drain pipes thereof together with the chimney stacks of the property."
2) It isn't clear to me in the above whether the leaseholders own the loft space under the roof (although they own the roof) and also whether they own the air space above the roof (in case they need to go through the roof to make the alterations). Please can anyone clarify that to me?
3) My wife and I are tenants in common with my wife owning a majority of the shares. Should the landlord permission come from both my wife and myself?
Thank you very much,
David

macman

Do you have any objections to the work proposed? 
'Demised' simply refers to the parts which have been transferred by grant of the lease. It appears that your leaseholders have responsibility for maintenance of the roof and supporting structures, rather than the more common arrangement whereby the costs are shared.
Permission will need to be granted by all parties to the freehold, so both of you You'll probably need to engage a surveyor to value the work being done and suggest an appropriate fee for granting permission.
The leaseholder will need to serve a party wall notice, obtain building regs approval and possibly PP.

AdrianC

daknin21 said:

My wife and I are freeholders of a 2-floor maisonette in London. We live on the ground floor and the neighbours on the first floor are leaseholders.
The leaseholders have notified us that they want to make a loft conversion but need our permission first.
Their lease states that they cannot "make any structural alterations in the upper maisonette without the approval in writing of the landlord to the plans and specification thereof such approval not to be unreasonably withheld."
1) What does "unreasonable" mean in this context? What sort of reasons can be invoked by us (the freeholders) to not give approval?

Ultimately, who decides what is reasonable...? A first tier tribunal.
https://www.lease-advice.org/lease-glossary/first-tier-tribunal-property-chamber/

Can you support your reasons, if need be?
"I don't like it and don't want them to" - nope, unreasonable.
"It's too invasive to the structure and fabric of the building, <surveyor's report>" - reasonable. Their lease also states that "the landlord demises unto the tenant (...) the roof of the property and the rafters and beams supporting the same and the gutters and drain pipes thereof together with the chimney stacks of the property."
2) It isn't clear to me in the above whether the leaseholders own the loft space under the roof (although they own the roof) and also whether they own the air space above the roof (in case they need to go through the roof to make the alterations). Please can anyone clarify that to me? Yes, it's theirs. They can store their suitcases and assorted toot up there. Their space. 3) My wife and I are tenants in common with my wife owning a majority of the shares. Should the landlord permission come from both my wife and myself? Either of you can reply on behalf of the freeholder, assuming you are in agreement. But there's no reason not to joint-sign.

eddddy

daknin21 said:

1) What does "unreasonable" mean in this context? What sort of reasons can be invoked by us (the freeholders) to not give approval?

"Unreasonable" isn't defined in the legislation. If you refuse consent, ultimately it would be up to a Tribunal (Court) to decide whether your refusal was unreasonable. They would look at the specific facts of your case.

But example 'reasonable' reasons for refusal might include:

• It would impact the structural stability of the building
• It would introduce fire safety risks
• It doesn't meet current building regulations
• It requires, but as not been granted, planning consent
• It has a detrimental impact on your downstairs maisonette 

You'd probably need to back up your reasons with experts' reports (e.g. Surveyors, structural engineers etc)

If you want to be a 'difficult freeholder', you can argue about the airspace above the roof, the loft etc. TBH, I suspect you'd ultimately lose that argument in court, but the upstairs leaseholders might agree to pay you a few grand anyway, to avoid all the hassle of going to court.

princeofpounds

I've looked into some case studies on this in the recent past. The definition of reasonable reasons for refusal does not appear to be a particularly high bar. For example, there was a case where someone cut a small hole to vent a boiler in a new position in a flat, and the freeholder's refusal to accept it was deemed reasonable because it involved work to the structural fabric of the building that was owned by the freeholder. It did not matter that it was relatively insignificant.

However, their lease is unusual in that they have been demised the roof, which gives them more scope to act than they would normally have. For example, it might be hard for you to object to a skylight window - it exists totally within a structure demised to the leaseholder and has no real impact on you. But if they want a full-blown conversion then I still suspect it would be impossible for them to avoid affecting parts of the structure owned by you.

There is also a possibility that you have a third course of action, which is to demand a premium (cash) for permission to convert. That would be the case if what they want to do requires tying in with construction that you own. 

You can of course charge fees to cover consideration of granting permission, including the hiring of expert advice, but it's probably best not to take the mickey unless you really want to facilitate it, but protect your own interests. If you plan to refuse, refuse early before they spend money and get their hopes up.

The link below has more information, including a brief discussion of loft conversions. 

https://www.lease-advice.org/article/consent-to-alterations-improvements-in-a-leasehold-property-what-charges-can-be-justified/

daknin21

Thank you all for the very helpful advice!

daknin21

Following my questions above, we have been engaging with the leaseholders who said that they have already got a property solicitor who has gone through all their leasehold contracts and is happy to create the necessary paperwork for us to sign, so they will pay for this.

My first question is, is it worth us talking to another solicitor on our side just to make sure that their plans and all the documentation is in order? And on the basis that they have already found a solicitor and are paying for this, would it be reasonable or not to ask them to pay for our solicitor too?

The leaseholders have also said that they will pay for any necessary surveyor fees. Again is it worth us hiring a surveyor separately just to ensure that their conclusions are consistent with those from the leaseholders' surveyor?

Thank you

HampshireH

daknin21 said:

Following my questions above, we have been engaging with the leaseholders who said that they have already got a property solicitor who has gone through all their leasehold contracts and is happy to create the necessary paperwork for us to sign, so they will pay for this.

My first question is, is it worth us talking to another solicitor on our side just to make sure that their plans and all the documentation is in order? And on the basis that they have already found a solicitor and are paying for this, would it be reasonable or not to ask them to pay for our solicitor too?

The leaseholders have also said that they will pay for any necessary surveyor fees. Again is it worth us hiring a surveyor separately just to ensure that their conclusions are consistent with those from the leaseholders' surveyor?

Thank you

How generous of them.........

They should be paying all those costs anyway not just offering.

Also the deed of variation for the lease to change it should it become an extra bedroom.

So in theory they need to pay for.

* Your surveyers costs to check the plans

*Licence to alter
see

https://www.licencetoalter.com/#:~:text=Licence to Alter is the,alterations may be carried out.

For a bit more about what this entails. Some really useful info at the bottom.


* Planning permission

* Deed of variation to the lease. Possibly updated Lease plan to show the changes. You would need to sign this as the freeholder and is usually drafted by freeholder solicitor and charged to the leaseholder.

The below may also help ou if you haven't read it already.

https://www.lease-advice.org/article/consent-to-alterations-improvements-in-a-leasehold-property-what-charges-can-be-justified/

eddddy

You should definitely get your own professional advisors (Surveyor, Structural Engineer, Solicitor etc). 


In legal terms, the cost of these would be part of the Administration Fee that you charge the leaseholder for considering their application for consent for alterations.


You should get the leaseholder's agreement in advance that they will pay this fee. In fact, many freeholders would insist that the fee is paid in advance.


(The reason being that if your Surveyor and/Structural engineer advise that you should not grant consent - and then you present the leaseholder with a bill for a few thousand pounds - they may not be too inclined to pay it.)




Your solicitor can also advise you whether there is scope for you to charge a premium to the leaseholder. (i.e. if the leaseholder wants to do something that is not permitted by the lease - like use an area which is not demised to them - so you can charge them a big chunk of cash, in return for allowing it.)

princeofpounds

Agree with the others - you get your own professional advice - of all sorts of different types - at their expense.

The problem you might have with their mindset is that unusual nature of the lease, demising the roofspace and roof to them. That means that they will see it as 'their' space and the risk of frustration is higher if they are prevented from doing what they want with it. Even if you are fully justified in stonewalling them.

So you'll probably have to have a talk with them to explain why it's so important to do it by the book and protect the interests of the whole building. Getting professional advice is expensive but it's what protects everyone's interests and make sure that everything is done properly.

macman

Of course they should pay all your costs. They should also pay you a fee that is reflects the uplift in the value of their property once the works are completed.