Future maintenance of a new alteration

[bamboccio]

Hello,

The context is a concerted house where leaseholders own the freehold.
The service charge is split by percentage of expenditure / costs.
One leaseholder is now going to alter his property and build a significant extension. This will cause a jump in the building insurance and an extra maintenance liability on what is being built.

I wonder if we should make the new extensions the sole responsibility of the flat / leaseholder (but this would not solve the insurance increase) or whether the percentages should change to cover the extra maintenance costs. Has anyone had any experience of dealing with this?


Thanks

[Sydaton]

Have you already given consent for the works? If not, now would be the time to make such apportionment % changes.

[bamboccio]

Thank you. Not yet and yes that is the plan.
I need to understand how much to change the amounts and I need to decide if the new extension should be the sole responsibility of the leaseholder making it or if it instead should become part of the freehold.

Any suggestions appreciated.

Thanks

[bamboccio]

Hello,

What should a landlord consider before granting a licence to alter for a new development?
We have received a party wall notice but not yet a formal request to alter. I am looking at service charge percentages but I wonder if there are any other important points such as who will be responsible for the maintenance of the newly built areas.

Many thanks

[AndrewDod]

I'm no expert - but what has a party wall notice got to do with what it appears you are asking (building some sort of extension on the freeholder's property that is not common parts accessible by other freeholders under their leases)?

You need to explain what it is you are talking about.

[Lawcruncher]

I am also puzzled why a party wall notice should be required.

Obviously you need to be satisfied that the structure will be sound and not prejudice the structural integrity of the building. If what is proposed is the sort of thing the average freeholder would be doing, such as extending a room or building a conservatory, you do not want to be going over the top engaging professionals who just check another professional's work. The leaseholder can end up paying as much in professional fees as he does for getting the building work done.

As for the service charge, assuming the extension will be of straightforward construction, the best arrangement is for the leaseholder to be wholly responsible for it and to leave the current contributions intact.

[Gordon999]

The % contribution to service charge account of each flat is shown in the lease and the total should add up to 100%. If one flat has added an extension, it should contribute a higher contribution to the service charge account ( and building insurance policy) .

The simplest way is to change to new % contribution figure based on internal area of flat, and to get the FTT to approve the new % figures.

[Neelix]

The party wall notice is a sensible step for the adjacent properties

[Sydaton]

As for the service charge, assuming the extension will be of straightforward construction, the best arrangement is for the leaseholder to be wholly responsible for it and to leave the current contributions intact.

It may be that that the characteristics of the extension make it less of a problem but with different parties having different responsibilities you might end up with only 80% of a rendered wall being repainted or only 80% of a roof being re-roofed, etc.

It might therefore be preferable to amend the % contributions rather than define that certain parts of the exterior are the sole responsibility of one leaseholder and the rest the responsibility of all.

On the other hand the other leaseholders need to be content with the quality of the build and if the maintenance profile is the same as the rest of the building. For example if the extension is built in render that needs painting every 5 years and a flat roof needing changing every 15 years then that's going to be a disproportionate expense if the main building is brick and tile.

So it depends on what the extension actually is and how it is built.

It's mentioned above that the FTT need to be involved but where amendments of a lease are required for the extension the changes to % contributions could be part of that same negotiation. And thus no need for the FTT.

[Lawcruncher]

So it depends on what the extension actually is and how it is built.

Than is a better way of putting it than I did.

If the extension is to come within the service charge, the licence can include a covenant by the leaseholder to make good any defects in the construction. If that is done, you need to be alert if the lease is extended and include the provision n the new lease.

It's mentioned above that the FTT need to be involved but where amendments of a lease are required for the extension the changes to % contributions could be part of that same negotiation. And thus no need for the FTT.

If the percentage contributions are going to be changed without reference to the FTT all the leases will need to be varied.

[Sydaton]

If the percentage contributions are going to be changed without reference to the FTT all the leases will need to be varied.

Indeed and with the % contributions going down for each lease apart from for the one being extended, it shouldn't be a hard sell.

[bamboccio]

Thank you to all.
I am not sure how the service percentages were initially calculated so I was planning to base the changes on the cost to rebuild which effectively is the insured value for the building insurance. This way I would have the cost to rebuild recalculated at works completion and proportionally reduce the percentage for other flats. For example if the cost to rebuild goes from 100 to 120 all other leaseholders would see their percentages drop by a factor of 100/120 with the flat extending picking up the difference to make it 100%.

Finally I mentioned Party Wall notice because we have only received that and not a formal request to alter as per our lease requirements: the lease has a provision to request consent prior to undertaking any alterations which I understand from reading other posts makes it impossible not give consent. Is this correct?

[Lawcruncher]

Please quote the alterations clause in full.

[Sydaton]

Is the proposed extension within the area demised to the leaseholder who would like to build it?