Freeholder trying to charge a premium for a licence to alter

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    Freeholder trying to charge a premium for a licence to alter

    Hi!
    I am a long term leaseholder of a garden flat in London. I am looking to extend my property to the side and rear. I have demise of the garden and the exterior walls between the foundations and the flat above. The Freeholder cannot withhold consent unreasonably.
    My Freeholder is asking for a fee of £5k to grant consent! Not including solicitors or surveyors or admin. We aren't in breach of our lease and our lease does not explicitly include provision for the Freeholder to charge such fees.
    Do you think he has a right to ask for such a fee? Is this common practice? As far as I'm concerned he will make money when the lease is extended and the property value will be increased.
    The downside is that I want to start building works soon so I want to avoid litigation.
    What does everyone think?

    #2
    If the space is genuinely demised to you, then the freeholder can only charge if there is a reduction in value or damage to his property, not for improvements, which is how an extensions will be looked at (Landlord and Tennant Act 1927). They can charge their reasonable legal and surveyors fees for the license to alter (I will come back to that).

    So, you could go back to the freeholder and state that under the terms of the Landlord and Tennant act, you believe that the works you are doing are an improvement of your demise, do not reduce the value of his/her property and do not cause damage to his/her property, therefore you do not think they are due. You could also state that you will agree to pay all other legal and surveyors charges as long as they are reasonable.

    The next step would depend on your freeholder...

    1) They could agree that they have no right to charge you the premium and simply give you the license to alter at the cost they have occurred.

    2) They could say to you that you cannot do the works without paying the £5,000. If that happens you need to go to the County Court and prove that the freeholder is refusing your application on the basis that he wants £5,000 - you would need a solicitor to help you go through this.

    3) Worse case scenario - they sit on your application and neither agree or disagree with you (this has been my experience with a loft conversion). In this instance, you will have difficulty proving that the freeholder has rejected your request. I went to court after waiting for 1 year to hear something, at court the freeholder argued that he was neither agreeing or disagreeing, simply considering the request. I lost, and 5 years later he is still considering the request (there is no time limit on considering the request).

    With the request for the £5,000 or any other costs you think are not reasonable, is to never agree to pay them. You should seek legal advice on the next step (or somebody will confirm this / reject this option), but if your freeholder is going to be difficult, then you can still pay the £5,000 and any other costs that you're presented with, but state at the time you don't agree with them (e.g. "we are paying this money because you have requested it, not because we agree with it. The payment of this money is without prejudice").

    Once you have your extensions completed, you can then raise a case with the first tier property tribunal (which is quite straight forward) and ask them to decide if the costs you have paid were reasonable administrative / service charges. They should find that the £5,000 is not a reasonable cost (under the Landlord and Tennant Act 1927) and if you have paid over the odds for solicitors and surveyors, you can ask them to look at that as well.

    Comment


      #3
      In my view it is a bad idea to pay any premium or costs "under protest" or "without prejudice". Apart from doubt about whether the words have any effect, if you want the cash back you are going to have to start proceedings. Far better to be bullish at the outset. It is unfortunately the case that some landlords and professionals see leaseholders as milch cows. A fee of hundreds of pounds for a licence cannot be justified. Construction of the average domestic extension, if it needs supervising at all, does not need supervising by more than one professonal.

      Comment


        #4
        You wish to increase the size of your flat to extend beyond the floor plan on your lease.
        If the freeholder had originally offered a lease with increased space than current, the cost of the lease would be more than you paid.

        Therefore, as the freeholder could have increased the size before issuing any lease, the freeholder would have that extra money.There is no reason you should benefit from the increase in the size of the property.
        You are leasing a set size. If you want to lease a larger size,then the lease price increases, and normally by a "cross my palm with gold, and you can have a bigger size flat".
        It is normal for freeholder to ask for 50% of the increase in value of the leased property.

        If I lease a car, can i go back and say, I have a 2 door, let me modify it to a 4 door. Then answer is no.
        If you want a possibly bigger car with 4 doors, they will say "cross my palm with gold, and you can have a bigger size car". It's just the same with a flat.

        Comment


          #5
          I don't agree with this - the garden is demised to them under the lease, so what the original poster would like to do is to extend his property into the space demised to him per the lease.

          If we keep with your car idea, it's more like renting a car and having to ask permission (and pay) the rental company if you want to put something in the boot.

          Comment


            #6
            Originally posted by manchesterpat View Post
            If we keep with your car idea, it's more like renting a car and having to ask permission (and pay) the rental company if you want to put something in the boot.
            No, we are talking about permanent alterations here, ot something that can be easily removed.

            That's more like renting a car then wanting to fit spoilers, wings, extended the wheel arches, and jack up (or lower) the suspension.

            Comment


              #7
              The analogy is not that straightforward as rental cars don't normally come with "not unreasonably refuse" clauses.

              I believe there is actually legislation that forbids premiums.

              What would make a difference, probably, is if the demise of the garden only extended to, say, 2m, and didn't include all the air space above it.

              Comment


                #8
                It is not King Louis's property. He is only renting it on a long term lease. The freeholder owns the building driveways, garden and flats, which he "Leases out to people"-- Note the word "lease", which is not to be confused with "Sold".
                Flat and garden and side ground is all leased. None of it was sold to King Louis, only rented ( let ) to King Louis in the form of a lease.
                Any long term rental over 21 years in duration, must be in the form of a Lease.

                If you wish to increase the Sq footage of a building from that originally rented ( demised ) to you, the freeholder can ask for cash.

                Of course, all leases must be changed at leaseholders expense to show revised dimensions and to also state that all maintenance for these extensions are not part of the service charges, and must be well maintained, and kept in good order, by the leaseholder that added them.

                Comment


                  #9
                  To the original poster, my advice still stands whatever ram says.

                  Theres advice on the lease advice website which agrees you don’t have to pay a premium if it’s your demise and I’d be happy to show you the relevant clauses in the relevant laws to support why I have reached my conclusion.

                  https://www.lease-advice.org/article...-be-justified/

                  Comment


                    #10
                    Make an application to the FTT for the consent fee to be reduced .

                    Comment


                      #11
                      I would note that you will require planning consent, as there are no permitted development rights in this case.

                      Comment


                        #12
                        If a lease includes both open land and a building or part of a building the open land is just as much part of the demise as the built part. Further, there is no upper limit to the open land unless the lease provides to the contrary.

                        If a lease of land and buildings does not prohibit extensions or other buildings from being erected on the open land and contains a prohibition against alterations without consent and provided no rights are interefered with, the position is no different from one where the tenant wants to make internal alterations. The aplication must be considered on its merits and the landlord cannot charge a premium.

                        Comment

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