Upfront agreement on freeholder costs for tenants improvement works

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    Upfront agreement on freeholder costs for tenants improvement works

    Hi,

    I have recently bought the long leasehold of a conversion flat. I am planning to do some improvement works to the interior including adding a wall, removing part of a load bearing wall and swapping the kitchen and bathroom positions.

    2 weeks after requesting permission from the freeholder through the managing agent i received a notice stating -

    That my request had not been put forward and that it would not be until i paid a £180 fee and signed a document agreeing to the following:

    1. An additional admin charge of £300 if a building surveyor has to be consulted regarding the works, plus the surveyors fees direct to them.
    2. An additional £100 if a surveyor is consulted to cover 'any initially anticipated future involvement in this matter which is deemed likely'
    3. Structure notices to be served on all parties involved (the other flats)
    4. In addition to the above fees, we (the managing agent) will make a 'one'off' extra site visit charge of £100 per hour if we are called to the property for any reason, as a result of the alterations.

    The fees while high don't seem ridiculous but i am concerned about the site visit charge which is rather unrestricted and excessive for an unskilled estate agent.

    Most importantly I just wanted to check that it would be OK to pay this initial fee and sign the document or if this was tying me into costs which could escalate while stopping me from being able to apply to LVT if the final costs are not reasonable? There is no mention of reasonableness in terms of the frees in the letter. If it is not advisable to sign this agreement what would be my next step?

    Any and all advice greatly appreciated.

    Rob

    #2
    First of all you have to check your lease to see what requirements if any that the lease makes on you to obtain consent. Until we have more details of that its hard to comment, but lets accept for now that consent is required.

    Second as to the alterations you propose the terms outlined are sensible and proportionate (subject to the above) but are sadly lacking on a number of issues and requirements including
    -the need for a licence to set out your agreement and to provide to future owners,
    -the building regulations approval and certification you will need for the works
    -not to mention general working restrictions eg times of work storage of materials and waste protection on common parts skips etc. That is particularly important to address your concerns over the reasons over which may attend site and charge.

    Once you have addressed those issues you wuill have a far better idea of what has been agreed and how to go about it with the minuimum of dispute.

    As to fees the FTT(nee LVT) can still determine these and any agreement should be with a caveat “any discussion or agreement at any time to any fees or costs of the landlord their agents or other professionals, are subject to my rights under the attached summary of rights for administration charges”.
    http://www.lease-advice.org/publicat...nt.asp?item=89
    Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

    Comment


      #3
      Hi Leaseholdanswers, many thanks for your response.

      My lease states
      Not to make any structural alterations or structural additions to the demised premises not to erect any new buildings thereon or remove any of the landlords fixtures without the previous consent in writing of the Lessor.
      I believe that under s.19(2) of the Landlord and tenant Act 1927 that the freeholder cannot unreasonably withold consent for the works and that structural works do include the erection of a partition wall as well as altering load bearing wall? Otherwise i could push on with that part of the work without consent?

      With regards to the other requirements I have a solicitor who can prepare a licence, i have stated that i will obtain building regs approval in my notice to the freeholder and going from other work that has been done at the property and general common sense there should be no issue with regards to working restrictions as long as the contractor undertakes the work in a careful and reasonable manner.

      With regards to the fees my concern here is with the point on the link you attached stating -
      However, you do not have this right where—
      ■a matter has been agreed to or admitted by you;
      Does signing the agreement as is constitute to me agreeing or admitting liability to such fees?

      If i were to respond to the fee notice with payment and signature on the document with a handwritten note stating that such fees should be reasonable as in accoradance with the Commonhold and Leasehold Reform Act 2002 would that cover me moving forward?

      Thanks again.

      Comment


        #4
        Can I suggest that you re read my post Your reply actually moves you backward!

        On fees I have suggested how to assert and maintain your rights under CLRA 2002, where the summary comes from. It means that you qulaify your signature or write with a covering letter refering to and agreeing issues a b c etc but subject to that caveat.

        As to the 27 Act consent does not seem to be an issue so it is of little help. Based on the post on your lease wording, work to a load bearing wall and relocating the K & B ,as landlords fixtures and fittings, is required, but on the latter it is very much pro forma in most cases.

        The partition wall may require consent if a structural issue arises such as fire or noise separation, or the proposal does not conform to the building regs eg the bathroom and WC will be in an open plan bedroom….! Yes I have seen just such an application.

        What most concerns me is that you are expecting that all will go well and all will behave sensibly. It is vital however that in regard to consent that what you agree with the builder on those issues is also agreed with the landlord and their agent, as issues mentioned earlier are the principal source of disputes.

        As the builder will agree a work program with you, on which their costs are based, it is vital that you know the LL’s requirements. Assuming a skip can go there or the old kitchen can stay by the bins till they finish, or the car park can be used to assemble things, can lead to arguments which increases in costs, for guess who- you. You may think that all of the above are sensible, however if so, you must get it agreed with them that they agreed before hand. Otherwise the builder bills for daily removal, or failing to record the condition of the common parts can lead to you paying for the damage that next door caused with their new wardrobe….

        As fussy as this sounds,like insurance its a pain,until of course you need to claim,or in this case a dispute arises.The agent has an incentive,so ring fence it!
        Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

        Comment


          #5
          Thanks again, your advice is such a great help! I think as you state i have been assuming that the process will go smoothly without fully considering the potential added complications/disputes and the costs which could be levied against me in relation.

          From your responses and other research my understanding of what i need to do now is as follows, please correct me if i'm proposing / doing something in the wrong order or incompletely!

          1. Respond to the MA to state agreement on the fees with the CLRA caveat.

          2. Also request at the same time what they require from me with regards to the works and their permission -
          -the need for a licence to set out the agreement,
          -the building regulations approval and certification needed for the works
          -general working restrictions eg times of work storage of materials and waste protection on common parts skips etc.

          3. Agree a programme of works with the builder linked to the MA requests. Also obtain buillding regs approval, structural engineers report and drawings in relation to the proposed works.

          4. Obtain written approval from the FHer having liaised with their surveyor on the documents above.

          5. Get the works done with any relevant checks along the way as previously requested by the MA.

          Apologies if i'm missing any points here, i'm picking this up as i go along and it does all seem rather complicated to the lay person, however i understand the need for the FHer to protect the interests of the property as a whole.

          One other thing if i may? Assuming i have plans drawn up, a structural engineers report done and get building regs approval, would the FHer be acting reasonably to at that stage refuse me permission to do the works if they felt that a small amount of extra drain pipe on the exterior wasn't to their liking or that the position of the new flue wasn't what they'd like?

          Thanks again,

          Rob

          Comment


            #6
            robfoster1980,

            Welcome to rip off city!

            A landlord is not entitled to be paid a fee for giving a consent, only to recover expense he has incurred. He may though require payment of compensation for any diminution in value of his interest in the building.

            Any surveyor's expenses should be proportional to the cost of the work involved.

            Comment


              #7
              Yes that right but a fee eg a premium , which is different to fees,the costs of a surevyor etc, which some can be confused about.

              On 4 the MA involvement is as the FH agent, assuming teh FH appoints them.

              In regard to the flue and external pipe work, there will be a general restriction in most leases not to change the appearance of the exterior, and if relocating waste pipes and flues, rarely is there a right to alter the walls and structure which are not in your demise - the lease.
              Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

              Comment


                #8
                Originally posted by leaseholdanswers View Post
                Yes that right but a fee eg a premium , which is different to fees,the costs of a surevyor etc, which some can be confused about.
                To clarify that, not only can a landlord not charge a premium, but he cannot charge a fee for the time he personally spends considering an application.

                Comment


                  #9
                  Originally posted by Lawcruncher View Post
                  To clarify that, not only can a landlord not charge a premium, but he cannot charge a fee for the time he personally spends considering an application.
                  Sorry but I think it important to look at that point as it might create confusion in the minds of this unfamilair with the process.

                  The distinction in your post is in simple terms the landlord " Ok erm right- alteration " and taking a view and putting certain processes in train, but the ability to distinguish between that and the established precedent that "in house costs" are recoverable, is one that is harder to clarify than it might appear to be.

                  Ironically the one man band or residents group are therefore incentivised to hand it over to lawyers etc rather than keep costs down by doing it themselves!
                  Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                  Comment


                    #10
                    Originally posted by leaseholdanswers View Post
                    The distinction in your post is in simple terms the landlord " Ok erm right- alteration " and taking a view and putting certain processes in train, but the ability to distinguish between that and the established precedent that "in house costs" are recoverable, is one that is harder to clarify than it might appear to be.
                    Fine, but here we have a clear case of double charging. What is the landlord going to do for the 480 pounds he wants to charge? You can get your conveyancing done for that!

                    Comment


                      #11
                      Originally posted by Lawcruncher View Post
                      Fine, but here we have a clear case of double charging. What is the landlord going to do for the 480 pounds he wants to charge? You can get your conveyancing done for that!
                      That’s precisely your point isn't it?

                      The landlord is not doing a lot, his MA is dealing with the matter (£180) and where required a building surveyor too (£300). These are all "expenses" that he can incur as distinct from him doing it himself, and recover.
                      Based on the information posted, I offer my thoughts.Any action you then take is your liability. While commending individual effort, there is no substitute for a thorough review of documents and facts by paid for professional advisers.

                      Comment


                        #12
                        I stand to be corrected but the approach to take might be to agree to pay the demanded amounts but that you withhold the right to dispute the administration charges at the First Tier Tribunal. If they don't agree then they would in my eyes be deemed to have unreasonably withheld permission.
                        I accept no legal responsibility for comments/advice I make on this forum. Please check with a solicitor before acting on statements made in a public forum.

                        Comment


                          #13
                          Thank you all for your further comments on this.

                          We do seem to have got to the point which leaseholdanswers kindly and expertly clarified for me and was the purpose of my original post - how to progress the matter while still being able to dispute the fees if, once the matter has played itself out, overall were unreasonable. My actions being to respond to the MA with the initial payment and agreement to breakdown but subject to my rights and the provisions under the CLR Act 2002.

                          The discussion has been very reassuring regarding my actions, thanks again.

                          Comment


                            #14
                            Originally posted by leaseholdanswers View Post
                            That’s precisely your point isn't it?

                            The landlord is not doing a lot, his MA is dealing with the matter (£180) and where required a building surveyor too (£300). These are all "expenses" that he can incur as distinct from him doing it himself, and recover.
                            That is not how I read the original post. We need clarification. (Even if it is the MA who is replying, how can 480 pounds be justified?)

                            Comment


                              #15
                              The £480 is obviously not reasonable but in the hope of getting agreement without too much hassle may be, in the big scheme of things, worth paying.

                              The ball is now rolling and I will happily update as to how the process is going and am fully prepared to question the ongoing fees once an indication of approval has been obtained. I think it is probably in my interests to keep relations sweet for as long as possible.

                              Then another 12 months down the line i get to sort the lease extension out too. The freeholder has already shown himself to be a money grabber - agreeing a non statutory lease extension on the flat below, to provide the new owner with a new lease (the flat has just been sold), for a given premium, only to request a further £3,000 between exchange a completion. Should be a fun ride!

                              Comment

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