Licenses to Alter – A Surveyor’s Perspective by Matthew Price of Peter Barry Surveyors
News article published on: 10th September 2018
Being a leaseholder in a building or block of flats comes with many stipulations, obligations & restrictions, most of which have a minimal day to day impact. One very important aspect of the lessee/lessor relationship is the requirement of the lessee to obtain consent from the freeholder when looking to undertake alterations. Naturally these can vary enormously from the refitting of a kitchen (unlikely to require consent), internal structural alterations and all the way through to acquiring additional space and extending one’s demise (such as a loft).
Whilst it may appear obvious that permission/consent is required for certain items of work, it is not an infrequent scenario to find a lessee having made significant steps towards undertaking works only, at considerable cost, only to be told that they have to negotiate the license to alter (LTA) with the freeholder. It would therefore suggest that public knowledge of the subject needs to be improved.
The overriding reason that freeholders require LTAs is that it enables them protect their asset which includes the various leasehold interests comprised within the building and are affected by the proposed works. The simple act of opening up a living room and installing a beam, does have the potential to cause damage to the property that shares the party wall into which the beam will be inserted, whereas the conversion of a loft space needs to consider the impact of the structure of the whole building as well as the fabric of the roof itself.
To start the process the freeholder will typically instruct their own solicitor and surveyor, with the former reviewing the lease and producing a draft LTA which outlines amongst other things, the parties involved, the particulars of the lease, leaseholder’s covenants in relation to the works, insurance and instructions upon completion of the works.
The surveyor will typically be instructed to inspect the subject property as to check whether there should be any further considerations or investigations that would only become apparent following a visit as well as inspection neighbouring flats, communal & external areas to record schedules of conditions. They will then amend the draft LTA, introducing requirements as they see fit and reasonable from a surveying perspective. Interim inspections may be required in order to monitor works as well as a final inspection to report on the quality of the final alterations.
The LTA process is certainly not limited to residential premises as commercial leases will also have strict clauses relating to alterations that the lessee can and cannot undertake without permission but are often wider reaching due to their nature. In a multilet building for example, the proposals may impact members of the public and be subject to Fire Risk assessments or fall under the requirements of the Equality Act 2010, (previously the Disability Discrimination Act 1995).
Ultimately the surveyor and solicitor need to work together as a team to produce a license that offers their client the maximum amount of protection whilst at the same time being aware that they cannot be too onerous on the lessee. On larger projects, the lessee will instruct their own surveyor/solicitor duo who will be quick to push back against such requests and even have the ability to claim against the freeholder if the process with being unduly and unreasonably delayed.