Licence for alterations

crichvb

I’m currently in the process of a buying a flat that has had the boiler repositioned, two partition walls and the chimney breast removed. All of the works were signed off by building control however the seller did not obtain a license for alterations prior to making the changes.

The seller applied for the license in retrospect and I have since received the following letter from the freeholder:

“I refer to the Lease document in relation to the above property and note the said document contains, inter alia, a covenant on the part of the Leaseholder not to make any structural alterations or structural additions to the flat nor to erect any new buildings thereon or remove any of the landlord’s fixtures and fittings without submitting plans in respect thereof to and without the previous consent in writing of the Lessor (such consent not to be unreasonably withheld) and to pay the Lessor’s reasonable fees and charges in connection with any such application for consent.

As no application was made to the Royal Borough for Landlord consent prior to completing the following works, there has been a breach of the lease terms:

Removal of Internal partition wall between kitchen and Living room to create an open-plan are.

Removal of internal partition wall in kitchen to create open space.

Re-position CH boiler.

Removal of chimney breast in living room.

I advise, however, that had such an application been made, the likelihood is that consent would have been given, subject to the grant and compliance with all relevant consents including Planning and Building Regulations. It is the Royal Borough’s opinion that it is not possible for formal consent to be given at this stage retrospectively. Due to this you must be satisfied with the Royal Borough’s confirmation that it does not intend to take any action in respect of the failure to obtain Landlord consent.”

My concern is that the lease includes a picture of the internal title plan which still shows the walls and chimney breast before removal. I assume as no formal consent is being given that the title plan will not be changed.

I have a feeling an indemnity policy will be offered to resolve this and I’m not sure if I should accept. Is this a major red flag?

user1977

An indemnity policy isn't likely to be an option now if the freeholder has already been tipped off about the breach. You'll be expected to be satisfied with the letter of comfort already provided.

crichvb

https://forums.moneysavingexpert.com/discussion/comment/81869000#Comment_81869000

I was thinking more for the lender than myself. I’m assuming that because the title plan doesn’t match the current internal layout they may want an indemnity to cover the difference in the lease.

Section62

https://forums.moneysavingexpert.com/discussion/comment/81869067#Comment_81869067

The lender will also have to be happy with the letter of comfort.

If the Royal Borough is the landlord then the letter should be as good as (if not better) than an indemnity policy.

eddddy

I would be asking why "It is the Royal Borough’s opinion that it is not possible for formal consent to be given at this stage retrospectively"?

Freeholders frequently give retrospective consent for alterations. The freeholder's use of the word "opinion" in this case makes it sound like they may think there's a legal reason, which might not be clear-cut.

More generally, the lease (and the law) says "consent not to be unreasonably withheld" - so the freeholder should be providing their 'reasonable' reasons for withholding consent. (They can't just withhold consent on a whim.)

As a wild guess, I wonder if it's something to do with the specific wording of that specific lease.

If the seller (or you) find out the freeholder's reasons for refusing consent, the seller (or you) can then decide if it's worth challenging the decision, or addressing whatever the issues are that are preventing consent.

Section62

As a wild guess, I wonder if it's something to do with the specific wording of that specific lease.

It could also be that as the landlord is a local authority, the consent would be ultra-vires unless given in accordance with the authority's scheme of delegation. It could be that delegated authority exists for consent to be granted for planned future work, but no such delegation exists for retrospective consent (/in the OP's circumstances).

In which case the legal/democratic services departments would have to work out what was needed to make a lawful decision - for example in the worst case it may involve a report to a full council meeting - which isn't something they would likely want to do unless it was crucial.

That could be the meaning of the words "to be given at this stage" (my emphasis) - meaning, it is something which could be done, but they have no intention of doing so.

I have limited knowledge of leasehold law, so the above is based on experience in local government and what happens when something out of the ordinary happens. Management and disposal of property and rights in property is one of the more tightly regulated aspects of local authority governance, so it wouldn't surprise me at all if retrospective consent needed the involvement of people at a much higher pay grade than the writer of the OP's letter.

eddddy

Section62 said:

It could also be that as the landlord is a local authority, the consent would be ultra-vires unless given in accordance with the authority's scheme of delegation.

<snip>

The (lawful) grounds for refusing consent for improvements/alterations are very limited. Things like it diminishes the value of the freeholder's property, it has a negative impact on other leaseholders (e.g. because the alterations impact the structural stability of the building, or it compromises fire safety.)

If it went to court, and the freeholder argued that they refused consent because they didn't want to have a full council meeting - I think the court would tell them that's not a valid reason for refusal.

On the surface, it seems illogical (and therefore unreasonable) to say "We would have granted consent if you had asked in advance, but we won't grant consent because you're asking retrospectively."

In what way are the alterations different, if you ask retrospectively instead of in advance? For example, are the alterations less structurally sound, or less fire resistant?

It's possible that they might say something like "Had you asked in advance, we would have sent our structural engineer to inspect the work as it was being carried out, as a condition of granting consent".

But if that's the case, the leaseholder might choose to agree to hack off the plaster so that the freeholder's structural engineer can inspect, in order to give retrospective consent.

Which is why I suggested that the leaseholder asks the freeholder for the reasons for refusal, to see if they are addressable or challengeable.

The OP doesn't mention which Royal Borough they are talking about, but fwiw, Kensington and Chelsea specifically say:

Obtaining retrospective consent

You can make an application for retrospective consent if you have already started or have completed works without obtaining permission. If you have partially completed work, you are advised to stop immediately as an application for retrospective consent does not guarantee your alteration will be accepted. There will be a non-refundable fee for retrospective applications and are issued at a higher cost than standard applications.

Link: https://www.rbkc.gov.uk/housing/information-homeowners-private-rented-tenants-and-landlords/homeownership/leaseholder-alterations-improving-your-home