Illegal Alteration

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    Illegal Alteration

    Guys if you could give some advise on the following query it would be much appreciated.

    I understand that a breach of a leasehold agreement needs to be determined by the FTT. Therefore my question implies a decision in my favour.

    Do any of you know how much a Landlord can reasonably claim in damages when a leaseholder carries out an alteration without the written consent of the Landlord i.e. in an instance where they cannot reininstate the property?

    Also can you charge/claim damages for individual alterations? The leaseholder I refer too has carried out two alterations.

    #2
    What harm have the alterations caused? The compensation is going to be be for the reduction in value of the property, and the professional services needed to evaluate the safety of the result, do the valuations, etc.

    Comment


      #3
      Thanks for your response. But I doubt you are correct. If you were a leaseholder could carry out alterations, for which permission is required, and then simply claim they have increased the value of the property i.e. the ends justify the means.

      The issue is that the leaseholder carried out alterations without permission thus breaching a covenant of the lease. For this the penalty is that they reinstate or pay damages. Which takes me back to my question.

      Comment


        #4
        There are no penalties for breaching leases, only compensation. I think the worst case for the leaseholder would be an injunction requiring them to re-instate the previous situation. There are penalties for breaching injunctions. However you have said that it is impossible to reinstate the original situation. I'm not sure why that is. Could they not demolish and rebuild?

        Did the lease absolutely forbid alterations, or just require permission? In the latter case, they would have been able to get permission for an improvement, any way.

        Comment


          #5
          Originally posted by puckxxx View Post
          ...But I doubt you are correct. If you were a leaseholder could carry out alterations, for which permission is required, and then simply claim they have increased the value of the property i.e. the ends justify the means.

          The issue is that the leaseholder carried out alterations without permission thus breaching a covenant of the lease. For this the penalty is that they reinstate or pay damages. Which takes me back to my question.
          "Damages" implies that there has been some sort of loss.
          If you wish to claim damages I would think that it will be reasonable for you to be expected to justify this loss - and a tribunal or court would almost certainly expect this.

          Where a premium would be payable for permission to allow alterations, I would generally expect tribunals to allow higher premiums for retospective 'permission' where a lease has been breached and alterations have already been made without consent than they might normally consider reasonable for prior consent - as long as they aren't excessively high (although this might not be the case).
          I would also expect all other costs the freeholder has incurred (professional fees for surveyors etc, tribunal and solicitors costs, and even payment for the freeholders time in dealing with safety concerns at least, to be allowed - as long as they aren't excessive.

          I don't think that you can expect any payment that would not otherwise have been required, or is required to cover costs resulting from the breach.

          I don't think that you can impose a penalty on top of what you would otherwise have required to be paid if permission had been granted, or now need to pay out yourself, but you might be able to demand that the property is reinstated as it was unless X amount is paid, and hope that the leaseholder will pay this rather than incurring the cost of reinstating the property to how it was prior to alteration (the amount you ask for needs to be at least sufficient to cover all your costs, and something the leaseholder is likely to grudgingly pay when compared to the combined cost of the original work and the cost of reinstating the property).

          Comment


            #6
            Hi Puckxxx

            I think it would help if you could provide a little more information about the breaches: what did the leaseholder actually do? Further, perhaps you could provide a summary of the clause or clauses breached.

            Since learning of the breaches, what action have you taken?
            Have you continued to acknowledge the leaseholder as a leaseholder?
            Does the lease contain a clause re section 146?

            Although arguably extreme, the ultimate sanction is forfeiture. Though this rarely happens (a good thing in my view), forfeiture is possible in relation to breaches of lease.

            Comment


              #7
              As vmart implies, it's not really possible for even the contributors who are likely to be most knowledgable on this type of thing (not me!) to suggest what it might be reasonable to claim, without knowing what the breaches are (and why you say they can't be reinstated).

              Forfeiture would usually be the maximum penalty, but generally unlikely in most circumstances.

              P.S. I'm assuming that 'illegal' is the wrong word, and it's just a breach of lease and not something that breaches legal requirements - if the latter applies the alterations need to be made compliant with the law.

              Comment


                #8
                A Tribunal is likely to ask you what you would have said had the leaseholder applied for permission as required by the lease. If you are going to say that you would have refused consent, you should be prepared to give your reasons.

                The Tribunal would then consider the facts, what work has been carried out by the leaseholder, whether or not the standard of work is satisfactory, whether or not there is any change in the value of the property.

                The Tribunal’s decision can be anything from a smacked wrist and a warning to the leaseholder to comply with the lease in future to an order to reinstate the property as it was or compensate you for any loss that you may have suffered.

                Without the facts, we are unable to assist further and even then a Tribunal may take a different view to people on here.

                Comment


                  #9
                  How long ago were the alterations carried out?

                  How extensive are the alterations?

                  Did the alterations involve encroaching outside the property comprised in the lease?

                  Were you the landlord when the alterations were carried out?

                  If the answer to the previous question is "yes", did you object while the work was in progress?

                  Do the alterations compromise the integrity of the building?

                  Comment


                    #10
                    Have you accepted ground rent/ service charge since becoming aware of the alterations?

                    Comment

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