To move or to improve? Legal considerations when looking to improve a leasehold property

15 May 2020 | Amber Larner-Bird
hampstead house

In an uncertain property market many of us are looking to stay put and make what we already have better to add value to the property – whether this be an extension, loft conversion or even simply knocking down walls.

When you own a freehold house this task can involve securing any necessary planning permission, obtaining building regulation consent and dealing with any party wall disputes. For leaseholders, the consent of the landlord is a further hurdle to overcome.

Many of us think that when we buy a “leasehold” flat we are buying the “bricks and mortar” and are therefore entitled to make whatever alterations we like once the necessary consents have been obtained – however often this is not the case. Before considering carrying out any alterations to your leasehold property you first need to consider the terms and obligations placed on you by your lease. 

Lease terms and obligations

The first legal consideration if you are extending your property is to see what is included within your “demise” – i.e. what land or parts of the property you actually own.

If you want to extend into the loft, side return, garden, etc you will need to consider whether you own the land and airspace into which the extension will project. If the land and airspace is within your demise then it is likely that your Landlord will not be able to unreasonably withhold consent to the proposed extension. However if the land and airspace fall outside of your demise then the freeholder may be entitled to remuneration – i.e. a premium – for the space they are releasing from the freehold to you for your extension or refuse consent.

In either situation you will need a legal document called a Licence to Alter to evidence the Landlord’s consent and where you are carrying out alterations outside your demise you may also need a supplemental lease or a deed of variation of your existing lease.

The second legal consideration – what does your lease say about the need for consent from your landlord? The type of alteration that requires the landlord’s consent is wide ranging and dependent completely on the terms of your lease.

Your lease may prohibit structural alterations entirely and require you to obtain consent for all non-structural alterations. The lease may also contain provisions preventing you from changing the layout of the flat i.e. moving the kitchen or bathroom.  The lease will usually provide for written consent however we would advise getting this “written consent” by securing a licence for alterations which gives consent for the work and covers the extra obligations and liabilities you will have for the works, it also gives your neighbours some recourse should thing go wrong.

Carrying out alterations on your leasehold property

Before you carry out any alterations we would advise that you check your lease thoroughly and/or take legal advice as there are examples of consent being needed to put in a new kitchen or even to take our carpet and lay a wooden floor.

If alterations are carried out without consent you are likely to be in breach of the terms of your lease, this has two practical consequences:

  1. Firstly, you are unlikely to be able to sell your flat until the consents have been obtained, as a potential buyer is unlikely to be willing to take on the outstanding breach; and
  2. Secondly, the freeholder may take legal action against you the breach of lease which could mean paying damages or even having to reinstate the property back to how it was before the alterations.

In summary the carrying out of alterations is often more complex than you would imagine with the need for consent dependent on the type of works you want to do and the terms of the lease, you are also likely to require the advice of a surveyor and possibly a structural engineer.

Blog post written by Amber Larner-Bird

 

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