Loft conversion- adding it to lease- valuation- consent

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    Loft conversion- adding it to lease- valuation- consent

    Hi all,

    I have a question relating to leasehold and am not sure whether this is the right part of the discussion forum.

    Issue:

    I bought my flat 2 years ago and extended the lease back to 99 years at the time of purchase. I am looking to convert the loft which after much backwards and forwards with the freeholder have established that the loft space is mine. As I am required to obtain freeholders permission to convert the loft this is what I did. The proposed loft will be a dormer loft and therefore does extend beyond the existing roof. I was under the impression, possibly ill-informed, that the freeholder is obliged to grant permission subject to “reasonable administration costs”. However the freeholders solicitor has come back and said that as the proposed loft extension extends beyond the original demise of the property, a new lease would have to be drafted and that I would have to pay an “appropriate premium” plus solicitors costs as the new loft would increase the value by £20,000. At this stage I do not know what they consider an “appropriate premium” to be.

    Has anyone come across this type of thing before ?

    Many thanks

    #2
    No, but it is critical to decide if your existing lease does (or does not) include the loft. If all of it is agreed as already being yours, no new lease is required. If it is not, e.g. because part is yours and the extension part is not, a short document (Supplemental Lease) is necessary, the price ["premium"] to be as negotiated.
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Thanks Jeffrey. We have established that the loft space and roof is mine. If the loft conversion was contained within the existing roof I don’t think there would be much of a problem. However in order to achieve the necessary height, I need a dormer loft so in effect I am looking to extend out a little bit into the air space.

      Comment


        #4
        Originally posted by jamesyoc View Post
        Thanks Jeffrey. We have established that the loft space and roof is mine. If the loft conversion was contained within the existing roof I don’t think there would be much of a problem. However in order to achieve the necessary height, I need a dormer loft so in effect I am looking to extend out a little bit into the air space.
        Isn't your air rather expensive (£20 000)?
        JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
        1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
        2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
        3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
        4. *- Contact info: click on my name (blue-highlight link).

        Comment


          #5
          I know :-). Although the 20k refers to the value the freeholder thinks new bedroom and ensuite bathroom that I would be converting the loft into is adding on to the value of the flat (not taking into consideration that it will cost 30k to do)

          That is why I am thinking the freeholder is just chancing their arm as:

          1) I don't know where they got the figure of £20k from and

          2) They refer to an "appropriate premium". I would have thought that if they were confident of the ground they were standing on, they would provide a figure straight away.

          I am not sure what to do now as if I have to negotiate an "appropriate premium" it is not worth my while economically to continue and also I would hate to have to negotiate if I was in the right all along.

          Comment


            #6
            You don't actually have any legal right to a lease of the extra air- so, if you cannot agree L's figure, you are unable to force the issue.
            However, if you withdraw, L then loses chance to sell air for £20 000- so L might negotiate anyway.
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment


              #7
              Thanks Jeffrey.

              I don't think the F/H is looking for 20k. That is in their view what the flat will increase by with the conversion. I am not sure I want my F/H to gain from any increase in value of the property. In the process of finding out what is "appropriate" in their eyes but only wanted to get an idea of who was in the right here.

              Comment


                #8
                I still have to get a surveyor. Was waiting until I could get a definitive answer on the legal side. My own solicitor has not come across this before. Usually when a leaseholder requests permission they receive it with reasonable administration charges.

                Comment


                  #9
                  Originally posted by jamesyoc View Post
                  I still have to get a surveyor. Was waiting until I could get a definitive answer on the legal side. My own solicitor has not come across this before. Usually when a leaseholder requests permission they receive it with reasonable administration charges.
                  ...because there is usually:
                  a. a right for T to obtain the permission (on terms); and
                  b. obligations on L:
                  i. to reply within a reasonable time; and
                  ii. not to withhold it unreasonably.
                  Neither of these obligations applies in your situation, unfortunately.
                  Last edited by jeffrey; 14-08-2007, 21:26 PM.
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                    #10
                    I would have thought a reasonable sum for the landlord to claim would be 1/3 of the profit from the development. So if the property rises by £20k and its costs say £12k to do thge works as a freeholder a claim of 1/3 of that profit of £8k ie £2,750 would be reasonable. The freeholder might accept say an increase in ground rent of say £100 and a premium of say £2k.

                    Comment


                      #11
                      Thanks for the input sgclacy. I would expect that the cost of the work would equal any rise (and may even be more) but not sure they see that. I am looking for the extra space as opposed to any huge increases in value (though that would be nice) My ground rent is already £200 per year, so wouldn't want to see that go up to £300.

                      Comment


                        #12
                        Just to finish off this thread. I have now received notification that the freeholder is looking for £10,000 plus solicitors fees of £1,000.

                        Comment


                          #13
                          Originally posted by jamesyoc View Post
                          Thanks Jeffrey.

                          I don't think the F/H is looking for 20k. That is in their view what the flat will increase by with the conversion. I am not sure I want my F/H to gain from any increase in value of the property. In the process of finding out what is "appropriate" in their eyes but only wanted to get an idea of who was in the right here.
                          How many flats in your block ? Have you thought about buying the freehold before you start on any loft conversion ? The leasehold title is only a long term rental contract. Since your lease is 99 years from 2 years ago, you are going to have the lease extension problem in less than 17 years from now.

                          Comment


                            #14
                            Originally posted by tenant29 View Post
                            Have you thought about buying the freehold before you start on any loft conversion?
                            NB: tenant29 means "collective enfranchisement", i.e. all lessees together acquiring whole f/r.
                            jamesyoc: Do not even think of buying own f/r alone. Never ever sever.
                            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                            4. *- Contact info: click on my name (blue-highlight link).

                            Comment


                              #15
                              There are two flats in the converted house. I had thought about buying the freehold but the problem is that the guys who own the other flat are in the process of selling it so I would have to wait until they move to broach the subject as I believe I would need them to agree to buy the freehold as there are only two flats.

                              Comment

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