License to Alter Premium Query

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  • jazzythumper
    replied
    I've sent you a DM as I'm not sure it's a good idea to post the correspondence here.

    Leave a comment:


  • Lawcruncher
    replied
    Landlords and their advisers know they are in the driving seat and rely on leaseholders taking the line of least resistance. There are times when taking the line of least resistance is a sensible way forward, but I cannot see that volunteering to pay £5000 can in any way be justified.

    You have not said how long ago it was since you applied for consent. If it was fairly recently then I think you need to do some pressing before considering taking action. Have you put the law to them?

    Before you take any decision, perhaps we can go into what has been said so far. If the exchanges have been in writing, what has the landord or his agent said? If there is some indication that they will consent that may amount to actual consent. Please quote exact words.

    Leave a comment:


  • jazzythumper
    replied
    [QUOTE=Lawcruncher;n1114655]

    Sorry, but absolutely not! Why give the landlord a windfall which cannot be justified? The landlord's interest in your flat is minimal. He or his predecessor took full value for it when the lease was granted.

    The law is clear. There is no need to pay.

    Originally posted by jazzythumper View Post
    With regards to point 3 if they didn't agree to this would it further reinforce that consent is unreasonably being withheld?/QUOTE]

    Not really, no, but if they do not come up with some good reasons for refusal they get close to unreasonably withholding consent..
    The reason that I suggested, the reduced premium was that I am wary of the legal costs of going to a county court to pursue a license to alter where we don't pay a premium and only pay the administrative costs.

    Is there not a risk that these costs could end up similar to any premium we would pay?

    This is what the Leasehold Advisory Service explained to us was a big risk of this.

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by jazzythumper View Post
    Is this a sensible approach?
    Sorry, but absolutely not! Why give the landlord a windfall which cannot be justified? The landlord's interest in your flat is minimal. He or his predecessor took full value for it when the lease was granted.

    The law is clear. There is no need to pay.

    [QUOTE=jazzythumper;n1114609]With regards to point 3 if they didn't agree to this would it further reinforce that consent is unreasonably being withheld?/QUOTE]

    Not really, no, but if they do not come up with some good reasons for refusal they get close to unreasonably withholding consent..

    Leave a comment:


  • jazzythumper
    replied
    Thanks for all your help LC

    I spoke to The Leasehold Advisory Service, and have come to the conclusion that we should try and propose / negotiate the following.

    We note that the you are trying to charge us £15k for the premium to build an extension to our property.

    We have taken some legal advice and there are routes under the Landlord and Tenant Act and Commonhold and Leasehold Reform act that mean we shouldn't have to pay anything apart from the administrative costs for a license to alter.

    This is not a preferred route as previously discussed we're prepared to avoid this and pay £5k for the license.

    If we can't a agree a sensible figure for this license based on the fact that our proposals are much smaller and add much less value than the works carried out under the previous license then we will be unable to agree a license on these terms.


    Is this a sensible approach?

    With regards to point 3 if they didn't agree to this would it further reinforce that consent is unreasonably being withheld?

    Leave a comment:


  • jazzythumper
    replied
    Originally posted by trespas View Post
    The £15k you mentioned above - is that the ‘profit’ from doing the works, or the total uplift in value? I.e. is it that your extension costs are, for example, £10k, and the total estimated increase in property value is £25k, and it’s the profit on which that they’re demanding the premium?

    I’ve read conflicting accounts regarding whether the freeholder asks for a %, either the total uplift value, or the profit. If they’re requesting based on the former, could you push them to taking a % of the latter instead?
    The £15k is the total uplift in value, not profit.

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by jazzythumper View Post
    Just wondered if anyone had any further advice on this?

    Thanks

    Jazzy
    You are in the classic situation of someone who has rights which can only be enforced by action which risks legal costs wholly disproportionate to any benefit which may be obtained.

    I think the first step is to put the landlord right on the law quoting section 19(2) of the Landlord and Tenant Act. If you make no progress, the following options are available:

    1. You engage a solicitor in the hope that that shows you are serious and they will sit up and take notice. The snag with that is that it is not too difficult these days to run up a four figure bill without achieving anything.

    2. You threaten legal proceedings. Whether you actually take them requires careful consideration - see comment above.

    3. You give notice to the landlord that consent is being unreasonably withheld and that you propose to proceed with the works within whatever period you consider reasonable - I suggest a month is more than reasonable. If you are going to go ahead without consent you need to be very confident that consent is being unreasonably withheld. It is of course also a risk. You have to weigh up whether you think the landlord will risk the expense of litigation. The main snag is if you want to sell within 12 years as you have no consent for the alterations.

    4. You forget the whole thing.

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by trespas View Post
    I’ve read conflicting accounts regarding whether the freeholder asks for a %, either the total uplift value, or the profit. If they’re requesting based on the former, could you push them to taking a % of the latter instead?
    There are two possibilities:

    1. The lease has an absolute prohibition on making the alterations the leaseholder wants to carry out. If that is the case there is no obligation on the landlord to give consent. He can demand whatever premium he wants and the leaseholder either accepts or he does not. No valuation formulae apply.

    2. The lease has a qualified prohibition on making the alterations the leaseholder wants to carry out, that is the lease says that they cannot be carried without the landlord's consent. If the lease says that then (if the lease does not so provide) the consent must not be unreasonably withheld. The law goes further and says that the landlord is entitled to (a) compensation if the alterations diminish the value of his interest and (b) payment of any expenses incurred in connection with the granting the licence. If the alterations do not decrease the value of the landlord's interest the landlord is not entitled to a premium and since he is not entitled no question arises as to how it should be calculated.

    Leave a comment:


  • Section20z
    replied
    Just do it, let them try and sue you.

    Leave a comment:


  • trespas
    replied
    The £15k you mentioned above - is that the ‘profit’ from doing the works, or the total uplift in value? I.e. is it that your extension costs are, for example, £10k, and the total estimated increase in property value is £25k, and it’s the profit on which that they’re demanding the premium?

    I’ve read conflicting accounts regarding whether the freeholder asks for a %, either the total uplift value, or the profit. If they’re requesting based on the former, could you push them to taking a % of the latter instead?

    Leave a comment:


  • jazzythumper
    replied
    Just wondered if anyone had any further advice on this?

    Thanks

    Jazzy

    Leave a comment:


  • jazzythumper
    replied
    Thanks Lawcruncher, very helpful.

    The previous license was complicated and we had to remove and replace part of another flats demise that was owned by the freeholder as part of the works, so I am not too worried about that, without paying compensation we wouldn't have been able to do the works.

    But this extension to our summerhouse does not affect any other demise.

    How do you suggest we proceed on this? By making their offer have they unreasonably withheld consent? We have made a counter offer of significantly less money than what is proposed as we thought it would be the route of least friction.

    What's the best way to proceed forward from here?

    Leave a comment:


  • Lawcruncher
    replied
    Originally posted by jazzythumper View Post
    "Not at any time during the term to make any alterations or additions to the Demised Premises or to cut maim alter or injure any of the walls or timbers thereof or to alter the Lessor’s fixtures therein without first obtaining the written consent of the Lessor (such consent not to be unreasonably withheld or delayed)"
    As consent cannot be unreasonably withheld no premium can be charged. Statute is clear:

    In all leases whether made before or after the commencement of this Act containing a covenant condition or agreement against the making of improvements without a licence or consent, such covenant condition or agreement shall be deemed, notwithstanding any express provision to the contrary, to be subject to a proviso that such licence or consent is not to be unreasonably withheld; but this proviso does not preclude the right to require as a condition of such licence or consent the payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or any neighbouring premises belonging to the landlord, and of any legal or other expenses properly incurred in connection with such licence or consent nor, in the case of an improvement which does not add to the letting value of the holding, does it preclude the right to require as a condition of such licence or consent, where such a requirement would be reasonable, an undertaking on the part of the tenant to reinstate the premises in the condition in which they were before the improvement was executed.

    You should never have been charged before. Ask for a refund. Was the surveyor acting for you?

    Leave a comment:


  • scot22
    replied
    I believe making consent subject to that fee is unreasonable. Is it worth a few hundred, have a limit, to involve a solicitor ?
    Look for free initial consultation.

    Leave a comment:


  • jazzythumper
    replied
    Also the exact clause in our lease is

    "Not at any time during the term to make any alterations or additions to the Demised Premises or to cut maim alter or injure any of the walls or timbers thereof or to alter the Lessor’s fixtures therein without first obtaining the written consent of the Lessor (such consent not to be unreasonably withheld or delayed)"

    Is charging us £15k unreasonably refusing consent as the article above suggests?

    Leave a comment:

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