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Hi Josh, I spoke with you some weeks ago. I have an issue with my freeholder granting consent for building works. I have since recieved the following email from his lawyer. For information, I have been quoted £17,000 to carry out the the proposed works. The current value of my flat is £400,000 and is estimated to be valued at £415,000 after the proposed works. His email reads as follows: to me " Dear Natasha, I spoke to Mr Needleman. He is mindful that works to a property enhance value and where the landlord's consent is required (and the landlord is not obliged to give that consent) then the landlord will look to share in that enhancement. The parallel which he drew was in regard to where a the term of a lease is extended and there is a marriage value. He has said that with the enhancement in this instance he would look for a payment of £20,000.00. Regards, Alec." Please let me know your thoughts.
Thanks for your question. Please kindly RATE my answer when you are satisfied
Do you have a copy of your lease to hand please? If so can you confirm the wording of the provision that requires you to obtain consent. It may read something along the lines of no alterations without consent of the landlord or something to this effect...
How can I attach it? The site is only allowing me to upload a URL.
Thanks. Just reviewing...
Also about to upload another part of the lease
Thanks. That is all I need. The lease provides that consent must not be unreasonably withheld. In fact such a provision would be implied by virtue of section 19(1) Landlord and Tenant Act 1927 even if it did not appear. The landlord is overreaching himself. He is not entitled to charge a premium to provide consent to alter. He is entitled to charge a reasonable administration fee but this should be at cost and he should not make a profit from it.
A response along the lines of as he will be aware L&TA 1927 as above requires him not to unreasonably withhold consent and he is not entitled to charge a premium and you look forward to receiving consent without further delay as you would very much like to avoid a referral to the Leasehold Tribunal for a determination on the matter as in such circumstances you would have little alternative but to apply for costs against him
OK, could he not refer to the covenant re. garden land as a reason to refuse? Or can I take his proposal for the premium as provisional consent.
Sorry without knowing what works you propose to undertake I cannot comment on the garden covenant. How do the works effect the gardem?
Also, is he allowed by law to seek to share in any property enhance value?
he cannot seek a share of enhancement for works to your demise.
Is there any case law that you can refer to? I have known freeholders to ask for premiums and get away with it. One lawyer advised me to suggest that I arrange for an independant surveyor to give a value of the enhancement and propose a more realistic share. As mentioned the cost of the works will be £20,000 (aproximately) and should add around £15,000 to the value of the flat (I'm not doing it to make money). So I'm not sure what he will want a share of.
I am afraid I cannot research case law for you at this pricing level as the question value represents about £4 to me. However unless the work you propose breaches an absolute covenant - i.e. not to do something - as opposed to a qualified covenant - i.e. not to do something without landlords consent, and does not extend beyond your demise the landlord has no basis to claim enhancement value in granting permission. He is limited to reasonable administration fees only
Is there anything else I can help you with?
The proposed works will fill the side return and go into the rear garden by 1.8 meters.
Will I therefore be breaching an absolute covenant?
In terms of any works that do not extend the property I cannot see that there is any basis for an extension. In respect of the extension, the lease provides not to use garden other than as garden land. My view would be you can argue that it is quite in order to build in a garden and this is not a breach of that covenant. The covenant does not say for recreational purposes only. If the landlord refuses to accept this rather than risk a retrospective claim you may wish to consider an application to the Leasehold Tribunal for a determination on whether building would be in breach of that covenant or not.
You may consider seeking a ruling in the county court using this form:
If the court finds in the landlords favour then you would need to negotiate with the landlord for consent for the extension. if the court finds in your favour then the landlord cannot claim a premium.
Can I help with anything else?
This is my second question in as many weeks. Do I have to pay each time I ask a question?
I would need to ask customer services to clarify - I believe if you are on a subscription then questions are free but if not then they are chargeable. Would you like me to ask them to contact you?
That's OK, I can call them. So in summary, I should initially send them a response roughly outlining that he will be aware L&TA 1927 as above requires him not to unreasonably withhold consent and he is not entitled to charge a premium and you look forward to receiving consent without further delay as you would very much like to avoid a referral to the Leasehold Tribunal for a determination on the matter as in such circumstances you would have little alternative but to apply for costs against him.....
My worry is that the door to negotiation is then closed and he may then be less likely to compromise.
Yes and in respect of the garden your contention that building on the garden is not incompatible with and consequently does not breach the covenant re the garden because it is quite normal for homeowners to build on garden land and the covenant does not contain restrictions to the extent that the garden can only be used for recreation and the like. It is a badly worded covenant which leaves some room for interpretation.
If the garden covenant is decided in the landlord favour your concerns with regards XXXXX XXXXX landlord negotiating are pertinent however the landlord is clearly willing to consider negotiating now which means the prospect of money is of interest to him. This is unlikely to change just because he is successful in court and the money he can demand has a natural limit because too much and the project is unviable for you so I cannot see it should change matters significantly however there is no guarantee as you say
Is there any research I can do myself to find out whether the garden is absolute or not?
It is an absolute covenant - the question of interpretation is whether building on it breaches the covenant or not. In my view you can make a strong argument that it is not but the only way to be sure would be to seek a ruling on the matter by a judge.
Case law is a difficult and laborious process and tends to require access to specialist legal databases which are subscription only however case are available on bailii which is free though not ideal for searching. www.bailii.org
Would it help to mention that my garden has already been built on? I belive about 12 years ago. A studio, I have since been granted a certificate of lawfulness from the council although it is not in the lease\site plan.
It gives precedent certainly and therefore you could point to this as evidence to support your above argument and you could ask the landlord to comment upon this. It does not formally resolve the question of interpretation fully but it is helpful.
I hope you will forgive me - a client has arrived and I must step into a meeting. I hope the above has been of some assistance. I am sorry I am not able to give you a definitive answer on interpretation of the covenant. Unfrotuantely badly worded covenants cause all sorts of problems with interpretation.
Ok thanks anyway
If you're still there...finally. He couldn't charge me for the outbuilding in any way.
Sorry I am back...
The existing outbuilding?
Yes, if I do mention it, is there any way I can be creating a problem for myself? Could he take any action as the outbuilding doesn't appear in the lease.
No he could not realistically claim monies for that some 12 years on.