Don’t forget your Licence to Alter!

There are many different elements that will need to be considered in order for the vision of your extension to become a reality and it is apparent that a layperson is often unaware what professional help may be required along the way – there are the obvious ones; Architect, engineer and contractor, and to a lesser extent, the party wall surveyor.

In our experience, one of the major considerations that is both poorly understood and often forgotten by leaseholders/flat owners is the need for a Licence to Alter.  A license is issued in response to a request for the freeholder’s consent to the works. The exact nature of this consent will depend upon the contents of the lease and in particular what works the freeholder cannot reasonably withhold consent for.

A Chartered Surveyor who is experienced in this field can offer some general guidance but a solicitor will be able to interpret the alteration clause in the lease and provide more specific advice. What a freeholder can prohibit and what they cannot will have a significant bearing on their ability to charge a premium for said works. If works can be restricted, then it is highly likely a premium can be charged.

There can be some cross over with ‘development valuations’, in particular with requests to extend in to  loft spaces, but assuming that the freeholder is not entitled to charge a premium, what happens next?

The solicitor will review the lease and begin drafting the licence and the surveyor will review the proposals to determine how the works are likely to affect the external/common parts as well as any other leasehold properties within the building.

On large, typically commercial developments, it is common for both freeholder and leaseholder to have their own solicitor/surveyor team whereas for more modest residential alterations the leaseholder is more likely to rely on professionals chosen by the freeholder to cut costs.

The surveyor will schedule the condition of any parts of the property that could feasibly suffer damage during the works and, during that initial inspection, will also consider how potential inconvenience to other residents could be limited. If it is determined that an element is unacceptable, then this will be communicated to the leaseholder who will have to make appropriate design changes.

Additional information, such as structural calculations may also be needed along with information relating to the quality of the build. The solicitors will often request proof of insurance and a security deposit may be required. The licence will set out what works are permitted, the nature in which they should be carried out, and how the site should be managed.

All of this often seems to the leaseholder like yet another red taped hurdle to jump over but, as with so many things, the most menial of processes only show their benefit when they are ignored, the build doesn’t go to plan and the parties have to deal with the fallout.

If you are either a leaseholder proposing works, a freeholder who has received such a request or a share of freeholder in either situation, please call one of our team on 020 7183 2578 who will be happy to assist you or contact us via email.