When is it reasonable for the freeholder to withhold consent?

[stuheath]

Hi all,

I own 2 flats out of 4 in a share-of-freehold block and am planning to build a house on an adjacent piece of land currently used for parking (1 metre away, so not attached to the main four-storey building).

The planners have made favourable noises about the pre-app proposal, so everything's looking like it's in line with planning policy.

I need three of the four votes under our Articles of Association to get the consent, but the other two share-of-freeholders (and fellow company directors) are saying they are likely to withhold consent to alter because:

1 They don't want the hassle/noise/disruption of a build on the site (one of them lives in the block, the other rents his flat out)
2 The neighbours don't want a new building next to their house/garden
3 They are worried about the potential damage when building the foundations
4 The lease says the parking spaces are only to be used for parking

Are any of these reasons reasonable?

1 and 2 seem to be issues for the planning stage rather than freeholder consent - and are they acting in the company's best interests if prioritising the neighbours's views above an improvement? Also, I know that considering the quiet enjoyment of the lessees needs to be taken into consideration, but does this apply to a standard build that's professionally run and not even happening in the same building?
3 - I'll be engaging a surveyor to report on current state of the buildings, check the drawings/plans and supervise the work
4 - I'm applying to alter the use of the parking space, so this would need to change too and is part of the same process

My view is that because I'm going to be increasing the value of the reversion, by adding a new property to the freehold title, that this should hold sway over these other reasons and that consent cannot be unreasonably withheld. But I would say that, wouldn't I…

Any advice gratefully received

Stuart

[leaseholder64]

(3) The freeholder should employ an independent surveyor, at your expense, to check your surveyor and ensure that you don't deviate. If the foundations are deeper, you will need a party wall agreement, which might include the individual leaseholders, as well as the freeholder.

(4) I'm not clear on the status of the parking spaces, but if part of your demise, from the same freeholder, I would say that that would be an absolute blocker, as I can't imagine the lease says that you can ask permission to change their use, and your improvement argument only works, if you are allowed to to ask permission (but there is no explicit unreasonably refuse clause).

If I were another leaseholder in that block, I would be looking for every possible reasons to refuse. If it turned out I couldn't refuse, I would be looking for a large part of the profit on the development, as one reasonable reason to refuse is inadequate compensation for the increase in value.

[ram]

To whom does the land belong to at present - the current freeholder ?
I am assuming - yes.

That land is not for you to do as you wish.
It does not belong to you, it is not demised to you.

If I were there, It would be an automatic refusal. and I would call you deluded.

Surveyors reports or planning permission does NOT override the lease.
That land is for parking, and every leaseholder has the right to park there, and you cannot take that right away from them, as it is enshrined within the lease and the lease is law.
END of story.

Don't expect to build a house in the parking area, put it up for sale and make a huge profit, as if you did, the shareholders are entitled to that profit in equal shares.

You can't make you own lease or freehold documents, as; if you could build a house, the ground AND house would only be Demised to you in a lease, as the all grounds ( driveway, parking, boundary walls belong to the freeholder, and cant be separated.
The house would be subject to service charges ( insurance, driveway, drains, sewers, gardening, boundary wall rebuilding,etc ) as it is within the confines of the freeholders estate.

The leaseholders are right to stop you putting a house in the parking lot.
You cannot take away their right to park there nor to reduce their right to free passage over the existing ground.

[AndrewDod]

There seem to be a huge number of assumptions in the original post -- like that " "three of the four votes under our Articles of Association (*are needed) to get the consent" for you to build on land that is held in common under the lease.

As per ram -- you seem to have no clue what you are doing.

[stuheath]

Thanks for your replies.

Sorry, I should have made clear in my original post that the parking area is entirely demised to our 2 flats and there is no right of way over it for the other leaseholders (they don't cross it to get to the building). It's all part of the freehold title, but our 2 flats each have the flat and half the parking area are marked in red on their leasehold titles.

Does that make it more doable?

Best

Stuart

[AndrewDod]

More doable. But not much more.

The fact that it is demised to you does not mean you can do what you want with it (planning permission is irrelevant to this). For example if I have a detached garage demised to me, that does not mean I can build a second level room on top of the garage (any more than the fact that I own a top level flat does not give me the right to build upwards). Likewise if a parking place is demised to me that does not mean I can build a small flat in the parking space.

What is demised to you is a parking space.

This is what you need to understand -- you are not the freeholder. With leasehold you lease the property (or in this case a bit of no-property) but you do NOT own the land it sits/stands on (or in this case the land that nothing is sitting on). You are on a very long term 'let' of the land - and the entity letting that land to you is the freeholder (which is not yourself as such). So your fellow freehold owners are fully entitled to tell you to get stuffed or to pay them for the privilege of having permission given. Even a majority vote of the freeholder does not give you the right to do this, because the freeholder is fully entitled to be compensated, and a majority cannot vote to deprive a minority of their asset without compensation.

Furthermore (to state the obvious) your lease goes so far as to state what the space is for.

[stuheath]

Hi
Thanks - that all makes sense to me - much appreciated. So, similarly, if I was the owner of a share of freehold ground floor flat that came with a garden and I wanted to extend out into that garden, would the same rules apply? Would I need to compensate the freeholder for the uplift in value of my flat for building on a garden that I have bought the lease to and have the sole right to enjoy (issues of retained and supporting walls aside) for the next 990 years or so?
Thanks
Stuart

[ram]

Thanks for the clarification on the parking area.

The same applies to a ground floor flat with demised garden.
The land is leased to you as a garden, not as proposed building site, and for use as a garden only.

Sometimes a freeholder may authorise the building of an extension on a ground floor flat, if it's in their nature to do so. You will be asked for approximately for 50% of the increase in value of the lease, up front, and have to pay for the freeholders surveyors ( as well as your own ) as well as new plans and deed of variation to show the extended part of your flat.

Your statement "have the sole right to enjoy", yes you have,,, as a garden, as described in the lease as a garden, until such time as authorisation is granted to enjoy the garden as something else.

Suggest you buy a freehold house for your get rich quick ideas.

No get rich quicks for leasehold, as it's not your building or ground.

[leaseholder64]

I'm assuming that the freeholder is a company, and its articles require a special resolotion.

So your fellow freehold owners are fully entitled to tell you to get stuffed or to pay them for the privilege of having permission given. Even a majority vote of the freeholder does not give you the right to do this, because the freeholder is fully entitled to be compensated, and a majority cannot vote to deprive a minority of their asset without compensation.

Explicit in the question is the fact that, were a lease says "not without permission", there is an "implicit clause, saying "not to be unreasonably refused" added, if the requested alteration is an improvement, in the sense that it makes the property more valuable to the freeholder when the lease expires. To the extent that this is the case here, the get stuffed option is out, although the compensation one is still in.

Assuming this is the company case, it is the company that is getting compensated, not the other leaseholders, and I don't see how it can be forced to accept compensation, if it makes a constitutionally valid decision not to.

On the other hand, where the lease says no, with no option to request permission, which I assume is the case for the restriction to use as parking space, there is a right to say stuff it. In any case, the freeholder would be stupid not to request compensation..

If they should give permission, I hope the freeholder attempts to add covenants forbidding the keeping of motor vehicles, given the loss of two spaces and the need for an additional one.

[AndrewDod]

Isn't the question one of demise....

Lets take a standalone garage with a flat roof that is part of a lease. The leaseholder cannot build a second story on top of the garage because his demise ends somewhere in the middle of the bitumen on the roof.

If the lease includes a parking space, I think the demise ends pretty much at the ground.

A Company freeholder cannot vote by majority (regardless of the articles) to place something that is in the demise of the freeholder within the demise of an individual lessee (any more that it can vote to exempt a particular lessee of service charges).

The right to build a flat on top of the garages is a right that resides with the freeholder as a whole, not with an (or several) individual lessees. I cannot see how a parking space is any different (because of course the freeholder could decide to build a flat on stilts over the parking area without depriving the lessee of any of his demise) - just as the freeholder could build another story on top of the block as a whole -- a right of the freeholder not the top flat.

So I beg to disagree with you. It has nothing to do with a reasonable refusal of a lessee to make improvements to his own flat.