Share freehold - not signing off consent or freehold transfer

[Damian1a]

Hello

I own one of the flats (Flat 1) in 3 flats building, we do have share freehold split into 3, but no management company been set up. One of the freehold owners is very problematic. When owner of Flat 3 wanted to sell his own flat, owner of flat 2 did not sign freehold transfer with no explanations caused not completing sell. Now I want to split my flat into two units, I do have planning permission granted. I do need other two freeholders consent to be able to do it, Flat 3 got no objection and will sign it, but Flat 2 owner asking for £8k for his signature, because my flat will increase in value and he should benefit from it.
Summary Flat 2 did not sign freehold transfer for Flat 3, and now asking Flat 1 - me for £8k for consent so I can progress with my planning.

[leaseholder64]

What does the lease say about alternations? They cannot charge for the increase in value if it says consent is required, but they can if says no alterations are permitted.

[Damian1a]

Lease says under planning paragraph: not to carry or make any alteration to premises until all necessary notices under the planning permission been served and all necessary permission under the planning acts have been obtained.

[Lawcruncher]

Lease says under planning paragraph: not to carry or make any alteration to premises until all necessary notices under the planning permission been served and all necessary permission under the planning acts have been obtained.

That is the planning clause. What we need to see is the "alterations" clause, that is a clause the effect of which is that the tenant is not to make alterations or additions.

[leaseholder64]

On what basis do you believe you need a licence?

I hope there is also a clause requiring building regulations consent!

This is a difficult one to interpret because the clause seems to imply that alternations are permitted, but normally, unless the lease said that explicitly, they would be forbidden. I think you need to get at least the Lease Advice service to interpret your lease for you,

[leaseholder64]

Lawcruncher appears to consider the implication insufficient, in which case, if the lease says nothing more, the freeholders can refuse, without reason, or charge what they want.

[Damian1a]

Under :alteration and addition: paragraph: not to make any structural or external alteration or any additions to premises without the prior written consent of landlord

[Damian1a]

can not find anything about "I hope there is also a clause requiring building regulations consent!" in my lease

[leaseholder64]

You have conditional permission for alterations so they cannot refuse improvements and cannot charge a premium for them.

They could still insist on your paying to prove that they will not harm the structure.

However, you should have obtained permission before you did anything.

[Damian1a]

I do have one freeholder permission Flat 3, but not Flat 2 the one who is asking for monies £8-10k for consent, his justification is that all other freeholders should benefit from my gain.

How I could prove there will not be any harm to the structure.

My Flat 1 originally was a two separate flats which were combined into one large.

There is literally one wall 2x3.5m to split it, gas and electricity still remains from old flats.

[Macromia]

I know nothing about whether or not the landlord/freeholder would be entitled to charge a premium but, if they were allowed to ask for payment, I would expect the premium to be decided by all three "joint freeholders" and for the money to either go into a service charge account or be shared equally between the freeholders.

I may be wrong!

[Macromia]

Also, have you discussed how the service charge provisions for the block are going to change, and who is going to pay for lease alterations?

[Damian1a]

Yes, service charges rather 33% will go down to 25% for flat 2 and 3, I will cover lease cost alterations.
Flat 2 wants monies just for him.

[Macromia]

Yes, service charges rather 33% will go down to 25% for flat 2 and 3, I will cover lease cost alterations.
Flat 2 wants monies just for him.

I think I'd be inclined to suggest something like 20-22% each for the two new flats from your conversion and 28-30% each for the other two flats for service charges - and there will also need to be some sort of determination regarding the share of freehold. Even if you don't intend to sell either flat, at some point the leases will be sold, so what share of the freehold do you expect each to own?

The existing freeholders might prefer all four flats to equally share the service charges but they aren't likely to want their share of the freehold reduced. Buyers, on the other hand, might consider paying the same towards service charges as flats that are twice the size to be unfair, but would find having an equal share of the freehold to be beneficial.

If the new flats are going to have their own leases, it is the freeholder (i.e. the three of you) who will have to grant the new lease - and I think that it would be reasonable for any profit that you might have from having two leases to sell to be shared by all freeholders.

[Again, I am uncertain of the legalities of any of this and am just expressing my thoughts.]

[leaseholder64]

All this should have been sorted at licence to alter stage.

There should have been quite a bit of money to solicitors to change all the leases.

If there are any internal communal areas, you would almost certainly need a new fire risk assessment.