Harringay, Haringey - So Good they Spelt it Twice!
Loft conversion - freeholder premium
I'm looking for some advice on doing a loft conversion on a lease hold flat.
We're in the middle of a dispute with our freeholder. After six months of dragging their feet, he and his solicitor have acknowledged that the loft and the roof are included in the demise of our flat. Despite this, the freeholder is demanding a not-insignificant premium before he gives consent for us to do the conversion. He says his surveyor told him that he's entitled to it. Our solicitor says that he's not.
So, we're at an impasse.
What do we do now? Do we get our own surveyor? And then what? If he comes up with a different figure, will it carry any more weight than our solicitor's opinion?
Obviously, we'd rather not go to a tribunal. At the same time, I don't want to pay any more than we have to. Building costs have increased in the past six months, so our budget is already pretty tight.
I'd be interested to hear if anyone else had similar issues. I've spent some time googling and reading forums, and it seems to be a common problem.
Any advice (or surveyor/valuer recommendations) would be very much appreciated.
Tags for Forum Posts: loft conversion
Replies to This Discussion
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Permalink Reply by MD on
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We did a loft conversion on a leasehold flat and our loft space wasn't demised to us - and it cost us tens of thousands to buy the space from the freeholder. So I really can't see how your freeholder can make a claim when yours IS demised according to your lease. Your solicitor is right: you don't owe the freeholder a penny beyond his legal fees for drawing up the docs giving his approval to the work going ahead. Have you tried the Leasehold Advisory Service? They might be able to help.
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Permalink Reply by Rainbow_carnage on
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Thanks for the suggestion. We did go to LEASE last year to clarify whether the loft space is included in the demise. They were very helpful, but it took ages. Might try to get an appointment with them.
Under different circumstances, we'd try to buy a share of the freehold, but the freeholder owns the other flat in the house, so it's not possible. From what I gather, the freehold is pretty much worthless (150 years, peppercorn rent), except for when it comes to consent for alterations, apparently, since he's asking for a lot more than it's worth.
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Permalink Reply by Rob B on
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I’m a solicitor who specialises in this area of law. (Property disputes)
It’s sadly not as simple as it might be. So it’s agreed that the loft is within your demise. So far so good. Unfortunately your lease also probably has a restriction on alterations of a structural nature and that is what the freeholder is hanging their hat on.
So what is the restriction?
is it an absolute prohibition? If so, then you may be out of luck and may have to pay what is demanded.
Does it say no structural alterations without freeholder’s consent such consent not to be unreasonably withheld? Then demanding a premium is unlawfully withholding consent.
Does it say the middle ground of no alterations without freeholder consent? Then statute can sometimes imply that such consent can not be unreasonably withheld but it’s a bit trickier.
If the freeholder is unreasonably withholding cosent your options are:
1) issue court proceedings for a declaration that consent is being unreasonably withheld
2) write a letter to the freeholder setting out why you think consent is being unresonably withheld and as such you intend to carry out the works in any event. THIS OPTION CARRIES SOME RISK SO GET LEGAL ADVICE BEFORE YOU DO IT!!!
in practice what tends to happen is you threaten proceedings for the deflation but then agree a nuisance premium of about £5k for the freeholder to go away. Annoying but so be it. Many freeholders are adept at this game.
This post is not legal advice and is just a general background of the relevant law etc blah blah blah:)
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Ps I don’t know why your solictor is talking about the tribunal. Unless I’ve misunderstood the scenario the tribunal has no jurisdiction for unlawfully withholding consent. It’s a county court matter.
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I've just listened to this podcast, which seems to suggest that you have to go to county court if the freeholder is refusing to give consent, and to a tribunal if he's asking for an unreasonable sum to give consent:
https://www.lease-advice.org/podcast/alterations/#
Now I'm even more confused.
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Hi Rob.
Thanks so much for taking the time to write out a detailed response. I really appreciate it.
Do you mind if I ask a few follow-up questions? Please feel free to tell me if I'm overstepping.
The lease says no alterations without the freeholder's consent. It does not say that such consent cannot be unreasonably withheld. However, if I understand correctly, even when it's not explicitly stated in the lease, it's covered by the Landlord and Tenant Act 1927, section 19(2). (Can you tell I've been googling?)
I don't want to keep pushing this if I'm in the wrong, but our solicitor says that he's not entitled to a premium. And if that's the case, then how is this anything but extortion?
I'm not really sure whether it's a case for a tribunal or county court. I thought that property tribunals dealt with cases relating to leasehold matters, but that could be wrong. Either way, would we be able to bring legal proceedings for damages (e.g. increased building costs)? I'm asking not because I'm hoping to get compensation (hopefully, it won't get that far), but the risk of losing and having to pay us might be enough to get the freeholder to give consent.
Also, would we need legal representation to do this? Our solicitor is not a litigator. We'd need to find and pay someone else. Our budget is already pretty stretched. But I also feel like we have nothing to lose. So could we do it ourselves, or would that be very stupid?
Thanks again.
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Google has not failed you this time. S19(2) is indeed the relevant statute. You appear to have understood it correctly and so that’s what you would rely on to say the Landlord was unreasonable withholding consent.
The tribunal has various jurisdictions for leasehold matters but this is not one of them.
As for a damages claim its technically possible but I won’t say more than that as there are too many variables to comment without seeing documents.
Could you run proceedings on your own? I’ve no idea. It really depends on what kind of person you are! Litigation is time consuming and stressful and some people don’t cope well. Others are very capable and can manage it. Judges give litigants in person some leeway but not a free pass and an attempt at compliance with court rules is expected. You’ll have to start reading the Civil Procedure Rules if you are thinking about giving it a go... remember in litigation you can be ordered to pay someone else’s costs as well, so there is never nothing to lose. But if you have a good case and a healthy attitude to risk it might be worth a stab...
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This is very helpful. Thank you, Rob.
If we do end up going to court, would it be because he's unreasonably withholding consent, or because he's asking for too much money? He hasn't said no to the alteration. He's just asked for a substantial payment.
Also, what sort of costs can we expect if we do have to pay a litigator? I realise that there are a million variables, but it seems like a pretty typical case.
On principle, if we do have to pay a lot of money, I'd rather it went to a solicitor, who will have earned it, than the freeholder, who isn't entitled to it.
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