Breach of covenant - converted loft in leasehold flat

user1168934

Hi all, I could really use some guidance please.

I am in the process of selling a leasehold flat that I bought around 10 years ago. It is a top floor flat with access to loft. The loft is not demised to the property.
Ever since I bought the flat, the loft had an enclosed room like space with boarded floor and walls with some lights. I always assumed that it was part of the original building and a bonus feature accessible through the flat. Never had much use of it apart from putting empty suitcases etc. Freeholder did not raise any objections at the time and I bought the flat without any issues.

Now that I am selling it, the freeholder have raised the objection that the loft is converted without their permission and that this is a breach of covenants. I think they saw pictures of the loft in the online advert. The freeholders have handed the matter to their solicitors who are now demanding around £20K to demise the loft space to the flat and to cover their legal costs.
It is a huge amount and does not really add £20K value to the property.

What options do I have?
I think it would be cheaper to remove the floor boards and chipboard wall and the lights. Do I have this option? How will they verify and approve it if I go down this route?

The solicitors are talking in single line sentences and take a week to respond to anything and I am literally having a breakdown - please help me guide through this.

lfc321

What does the covenant actually say?
Can't you just tell them (ideally with proof) that you didn't do the conversion, and that it must have been a previous leaseholder, not you, who breached the covenant? Seems unjust that you would be expected to pay £20k for a breach committed by a previous occupant.

eddddy

Just to clarify - if the loft isn't demised to the flat, that means you don't own the loft, and you probably have no right to go into it and use it.

So the freeholder is offering to sell you the loft for £20k.


So I guess your options are:

• Buy the loft for £20k - and then advertise that you have a flat for sale that includes a loft

• Don't buy the loft, block off the access, don't go in the loft anymore (and maybe remove the floor, lights etc) - and then advertise that you have a flat for sale (with no loft)

So the key question is... how much more would the flat sell for, if it includes a loft?

For example,

• If it would sell for £30k more with a loft - then paying £20k is a good deal
• If it would only sell for £10k more with a loft - then paying £20k is a bad deal

gwynlas

Even if the loft was demised to your apartment it could only be used forr storage as the freeholder could still veto a conversion. It would be up to you whether you thought that this would be worthwhile. It might be that a future leaseholder might wish to convert to create extra bedroom or if suitable another apartment.

user1168934

The space does not add any value to the flat and I do not wish to purchase it at such a high price. The flat has plenty of storage. I wouldn't mind putting it back to how it was. The freeholder have not even mentioned this option - I take it their preference would be to make money off of this space.
Am I correct to ask for the option to put it back to what it was?

The freeholder is also demanding around £2K for their legal fees. I am not sure why I am liable for anything. Is this something I have to pay?

HampshireH

user1168934 said:

The space does not add any value to the flat and I do not wish to purchase it at such a high price. The flat has plenty of storage. I wouldn't mind putting it back to how it was. The freeholder have not even mentioned this option - I take it their preference would be to make money off of this space.
Am I correct to ask for the option to put it back to what it was?

The freeholder is also demanding around £2K for their legal fees. I am not sure why I am liable for anything. Is this something I have to pay?

Why not just omit the photo and any reference to it from the advert as it shouldn't be there anyway.

Explain you bought the flat and when you looked the loft was already boarded. Whether it was done by the freeholder previously or a former lease you don't know.

You have no wish to buy it thankyou very much. 

If the freeholder says they want the boarding removed offer access for them to unboard it. 

loubel

You are describing it as a boarded loft space with lights, being used for storage and the freeholder is describing it as a conversion. What does the freeholder believe it has been converted into? And why put pictures of it on your sales listing? Are you using (or describing) it as a cheeky storage space or as an actual room? 

Regardless, you knew you didn't own it and had no right to use it and by advertising it you have drawn the freeholder's attention that you are using something you shouldn't be. Whether the breach (using someone else's property without consent) started before you bought is irrelevant, but it should be possible to agree with the Freeholder that you won't use it in future. You will still be responsible for their legal costs though as you are the one in the wrong.

eddddy

loubel said:

 You will still be responsible for their legal costs though as you are the one in the wrong.

The OP hasn't mentioned anything that would reasonably result in a legal fee of £2k.

Presumably the freeholder saw the property listing that mentioned a loft. Any reasonably competent freeholder should have been able to check the lease themselves to see that the loft wasn't demised.

The reasonable next step would be to send the leaseholder a letter.

A reasonable admin fee for doing the above might be £40 to £60 plus vat.


But for example, if the leaseholder ignored, say, 2 warning letters from the freeholder, or disputed what the freeholder was saying - then maybe it would be reasonable for the freeholder to instruct a solicitor and ask for legal advice.



@user1168934 - can you clarify what the £2k legal fee is for?

Also, can you clarify exactly what covenant the freeholder says you are breaching, and what you are doing that is causing the breach?

You'll need to get these things sorted before the sale can go through.

ThisIsWeird

user1168934 said:

I am in the process of selling a leasehold flat that I bought around 10 years ago. It is a top floor flat with access to loft. The loft is not demised to the property.
Ever since I bought the flat, the loft had an enclosed room like space with boarded floor and walls with some lights. I always assumed that it was part of the original building and a bonus feature accessible through the flat. Never had much use of it apart from putting empty suitcases etc. Freeholder did not raise any objections at the time and I bought the flat without any issues.

Hi User.

Could you clarify, please; "Ever since I bought the flat, the loft had an enclosed room like space with boarded floor and walls with some lights."? You bought the flat like this, all boarded out? Or, you boarded it out as soon as you bought it?

If the former, how was it referred to in your vendor's sales particulars? Do you still have a copy? Check Zoopla for this if not.

And, how have you/your EA referred to this loft space in your current sales partics?

If this work was done before you bought the place, and you can evidence this, then all you should need to do is provide that evidence to the LH, and change the description in your sales partics. Return the access method to whatever it was when you bought it. Your FH cannot hold you responsible for work carried out by your predecessor - I'm nigh-on sure. But he can become upset if you are implying more about that loft than you are entitled to.

Anyone viewing can make their own judgement on the usefulness of the loft space, but the EA should make it clear to them that you only used it for storage. They can add that the LH may be willing to demise the space to the flat owner for a sum, but that's not a given.

loubel

eddddy said:

loubel said:

 You will still be responsible for their legal costs though as you are the one in the wrong.

The OP hasn't mentioned anything that would reasonably result in a legal fee of £2k.

I believe the £2k legal costs mentioned was to add the loft to the lease.

Most leases will include a standard obligation to cover legal costs in the event of action being taken against a leaseholder for breach of their lease, which is what is happening here, so I would expect a legal bill for this. It shouldn't be £2k if the OP is not taking them up on their offer to sell the loft, but there will still be costs incurred. 

eddddy

ThisIsWeird said:

If this work was done before you bought the place, and you can evidence this, then all you should need to do is provide that evidence to the LH, and change the description in your sales partics. Return the access method to whatever it was when you bought it. Your FH cannot hold you responsible for work carried out by your predecessor - I'm nigh-on sure. But he can become upset if you are implying more about that loft than you are entitled to.

That's not really accurate.

If there is an ongoing breach of the lease, the current leaseholder is responsible for putting right the breach.

For example...

• If a hole has been cut in the ceiling to access the loft (by the current leaseholder or a previous leaseholder or anyone else) which is a breach of the lease, then the breach is continuing until the hole cut is undone.

• If the flat has had alterations (by the current leaseholder or a previous leaseholder or anyone else) without the required freeholder consent, in order to access the loft - the breach is continuing until the alterations are undone, or consent is obtained.

ThisIsWeird said

Anyone viewing can make their own judgement on the usefulness of the loft space, but the EA should make it clear to them that you only used it for storage. 

There is no suggestion by the OP that the leaseholder has the right to use the loft for storage.

Most leases wouldn't allow that.

ThisIsWeird said:

If the former, how was it referred to in your vendor's sales particulars? Do you still have a copy? Check Zoopla for this if not.

I'm not sure what you're getting at here. Are you suggesting that the OP make a claim for misrepresentation against the EA or seller? 

I think that would be a tough fight. Solicitors generally advise buyers of the importance of checking lease plans before they buy.