Vague lease wording - is a License to Alter required? If so, extra £3k costs

harrison247

Hi everyone, my partner and I bought our home as first-time buyers last year, a long-term leasehold maisonette, and we now hope to refurbish the bathroom. The alteration section of the lease reads as follows:

(13) Not at any time during the said term without the license in writing of the Lessor... to make any alteration in plan or elevation of the maisonette building hereby demised or in any of the party walls or the principal or bearing walls or timbers thereof...

The key bit is that no alterations in load-bearing walls can be made without a license from the lessor (i.e. freeholder). The cost of this license (plus a surveyor visit plus admin) would be over £3k, according to the freeholder's fees. Considering the other costs and benefits, this extra cost would not make the "ideal refurbishment" worth doing.

Our ideal refurbishment would involve 3 bits of work that relate to the walls. (Pictures below, my own rough drafts to give context to what I'm talking about.)

1. Installing an extractor fan in the exterior wall of the bathroom. (This is a bearing wall, but a vent/grill already exists on the outside.)

2. Connecting the newly positioned toilet to the exterior soil pipe by passing this through the exterior wall.

3. Removing the interior walls of a coat room adjacent to the bathroom. We understand from contractors that these walls are not load bearing, and would get a surveyor to confirm this.

I feel points 1 and 3 are likely fine, no license needed, but point 2 is the one I am most unsure about. It depends on the legal definition of what constitutes an "alteration" to a wall: does creating a hole and feeding a new pipe through the wall count as an alteration, even if it doesn't change the overall size/look of the wall? (All works will be done by a suitably qualified contractor.)

Any ideas or suggestions much appreciated! I will seek formal legal advice, but first trying to confirm that it isn't a clear yes/no either way.

user1977

Maybe! I have seen leases which specifically go on to say that inserting new pipes etc isn't an alteration, so presumably there's an argument that making any holes in the external walls is an alteration. Might be worth someone checking if a similar case has ever gone to court/tribunal.

Though you also may have the practical issue of a fussy buyer/lender picking up on it and insisting on retrospective consent.

eddddy

harrison247 said:

The cost of this license (plus a surveyor visit plus admin) would be over £3k, according to the freeholder's fees. 

Are they suggesting that a surveyor's visit is always required, or are they saying that if a surveyor's visit is required, the cost would be £x?

I think there'd be an argument that if the only "alteration" is a pipe-hole cut in a wall, it's not reasonable to require a surveyor's visit for that.

(Although a few times, I've seen pipe-holes cut in walls immediately underneath a joist or beam support point - so maybe those people needed a surveyor to tell them not to be so daft!)

Overall, the fees that the landlord charges for consent to alter must be 'reasonable' - i.e. sufficient to cover their costs and expenses. They shouldn't really be making a profit out of them. £3k sounds a bit steep - so it might be worth getting a detailed breakdown.

harrison247

eddddy said:

harrison247 said:

The cost of this license (plus a surveyor visit plus admin) would be over £3k, according to the freeholder's fees. 

Are they suggesting that a surveyor's visit is always required, or are they saying that if a surveyor's visit is required, the cost would be £x?

I think there'd be an argument that if the only "alteration" is a pipe-hole cut in a wall, it's not reasonable to require a surveyor's visit for that.

(Although a few times, I've seen pipe-holes cut in walls immediately underneath a joist or beam support point - so maybe those people needed a surveyor to tell them not to be so daft!)

Overall, the fees that the landlord charges for consent to alter must be 'reasonable' - i.e. sufficient to cover their costs and expenses. They shouldn't really be making a profit out of them. £3k sounds a bit steep - so it might be worth getting a detailed breakdown.

Good point. Full reply from freeholder below. So they are saying surveyor visit and license is required for any alteration (which clearly is not what the lease says), and that surveyor visit is £800 plus VAT. Full response below:

Thank you for the email regarding your interest to refurbish your property.

We must refer you to the relevant clause of the lessee's covenants in your lease, which states, that there is a prohibition against any alteration without the prior license in writing of the landlord.  No work must start until you obtain the License.  You will also need to get planning permission from your local council. 

Should you wish to proceed with such a plan you need to provide the Landlord with plans of the proposed works. 

Once we have the above information will appoint our own Surveyor to review the work to ensure that the works will be carried out in accordance with all necessary consents (planning/building regulations etc.) and in accordance with the terms of a formal License. 

They may make requests for ancillary information and considerations.  There are several categories that may need to be approved for full consent of the works:

 

1.       Structural works/removal of partitions

2.       Layout alteration 

3.       Flooring

4.       Electrical and other works covered under the building regulations

 

We will then prepare a formal License to Alter.  

Finally, we have to advise you that as a result of the recent Supreme Court decision in Duval v 11-13 Randolph Crescent Limited, if this applies to you, you will need the consent of the Leaseholder of your neighbor to your proposed alterations and they will need to join in the Licence for Alterations to confirm that consent and waive our client’s obligations as Landlords to enforce the alterations clause in your lease. 

This will be identified when our solicitor reviews your lease when you decide to proceed or you can find out now from your own solicitor.

Fess 

Surveyor £800+ VAT

Admin £150

License to Alter £1750 + VAT

Jonboy_1984

Where does the bath currently drain, does it currently go into the same stack underground level?

What’s in the cupboard at the end of the current bath? If a hot water tank has been there are you sure the cupboard walls are not supporting for any similar tanks in flats above?

harrison247

Jonboy_1984 said:

Where does the bath currently drain, does it currently go into the same stack underground level?

What’s in the cupboard at the end of the current bath? If a hot water tank has been there are you sure the cupboard walls are not supporting for any similar tanks in flats above?

No, the bath and sink drain from waste pipes that already go through the exterior wall (the 2 white pipes in the exterior wall photo) to the ground-level drain.

The room at the end of the bath is a coat room, empty of any permanent fixtures, and I believe it is the same in the maisonette above. (We're ground floor, they're first floor, nobody else above.)

eddddy

harrison247 said:

Fess 

Surveyor £800+ VAT

Admin £150

License to Alter £1750 + VAT

I guess it depends on what they want to do as part of the "licence to alter" - and whether it's necessary / reasonable.

In general, a one paragraph letter from the freeholder saying "We consent to the alterations shown in your attached plan" would be sufficient. 

(But whatever format the licence / consent takes, it's an important document, so you should keep it safe - in case the freeholder later denies they gave you consent.)

Lease plans often don't show internal walls, but if yours does and it shows the cupboard wall etc - that might require a deed of variation and as well as a new lease plan. That could account for a cost of £1700.

harrison247

eddddy said:

harrison247 said:

Fess 

Surveyor £800+ VAT

Admin £150

License to Alter £1750 + VAT

I guess it depends on what they want to do as part of the "licence to alter" - and whether it's necessary / reasonable.

In general, a one paragraph letter from the freeholder saying "We consent to the alterations shown in your attached plan" would be sufficient. 

(But whatever format the licence / consent takes, it's an important document, so you should keep it safe - in case the freeholder later denies they gave you consent.)

Lease plans often don't show internal walls, but if yours does and it shows the cupboard wall etc - that might require a deed of variation and as well as a new lease plan. That could account for a cost of £1700.

Okay, so I what I am now considering is adjusting the layout plan so that it does not need a license, according to the rules of the lease. This would involve:

1. Confirming with a surveyor that the coat room walls are indeed not bearing, and removing those.
2. Leaving the toilet in the top left of the room and putting the sink in the top right, which should mean that no new pipes need to be fitted through the exterior (bearing) wall.

If I do this, my inclination would be not to inform the freeholder, as I do not believe I would need to under the lease (which only says altering bearing walls needs a license), and the worst case is that they could dispute this or say that that if I want any form of written consent then there will still be a charge. But, when eventually selling the property, I would then need to state in the sale docs that works had been done in the property - in this situation it would be preferable to have some form of consent from the freeholder in case the buyer's solicitor questions this...

Jonboy_1984

Solicitors can often around these issues via indemnity policies if the freeholder is unaware.

What do you hope to gain with the revised plan? In our last flat the main issue was a lack of storage space and taking out cupboards seems odd to me personally.

harrison247

Current layout on the left, potential new layout on the right.

eddddy

harrison247 said:

But, when eventually selling the property, I would then need to state in the sale docs that works had been done in the property - in this situation it would be preferable to have some form of consent from the freeholder in case the buyer's solicitor questions this...

It depends on the mindset of the buyer - and their solicitor.

For example, if the buyer thinks the alterations should have been authorised, and there's a risk of the freeholder finding out about them sometime in the future - and coming after them with a £3k (or more) bill for retrospective consent, then they might be worried.

But they can get indemnity insurance. Or they might want to insist that you get retrospective consent before they'll exchange contracts. Or they might read the lease and agree that no consent is required.


The problem with getting retrospective consent when you sell is it can delay things. And some nasty freeholders will see it as an opportunity to charge 'rip-off' fees - because they hope you'll be prepared to pay 'silly money' to stop your sale falling through.