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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience:  Solicitors 2 years plus PQE
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We are four leaseholders and also four directors of the company

Resolved Question:

We are four leaseholders and also four directors of the company that owns our freehold. On of our leasholders bought their flat 11 years ago. They own the loft space (amendment to their lease). The other three leases were never amended to reflect this. Our leases state that:
"Not to make any alterations in or additions to the demised premises without the approval in wrting of the Lessor to the plans and specifications thereof"

They (some time ago) put a bathroom in and made two extra bedrooms in the attic space. The work (whenever it was done) does not meet building regulations as there is not a protected stairway leading from the attic rooms.

The lease also states that:
"To do all such works as under any Act of Parliament or rule of law are directed necessary to be done on or in respect of the demised premises (whether by landlord, tenant, or occupier) and to keep the Lessor indeminfied agains all claims, demands and liabilities in respect thereof"

The leaseholder concerned has not, so far been able to prove that they got permission for the work. It has now been discovered that key structural walls have been removed in their flat and they are working with surveyors in the council to agree remedial works to put that right.

The plans they have submitted for approval include the structural remedial works and the necessary staircase to the attic space and the conversion of currently used but "illegal" 2 bedrooms into habital space and a third bathroom. This would create a flat that has 3 large bedrooms and 3 bathrooms.

The other three flats are either 1 or 2 bedrooms and three out of the four directors do not want to authorise the work as we believe it will encourage over occupation and cause a breach of the "right to enjoyment clause":

"Not to do or permit any waste spoil or destruction to or upon the demised premises nor do or permit any acto or thing which shall or may become a nuisance, damage, annoyance, or inconvenience to the lessor or its tenants or the tenants or occupiers of adjoining premises and in particular of the flats or to the neighbourhood or whereby any insurance for the time being effected ion the demised premises or the Reserved Property may be rendered void or voidable or whereby the rate of premium may be increased".

There is also a clause that states:
"Not to use or permit or suffer the demised premises to be used for any purpose whatsover other than as a private residence in the occupations of one family only" whilst this would rule out use as MHO it could still encourage a high occupancy.

Our Articles of Association mean that three out of four directors have to agree for something to be "carried". With this information it is my understanding that we can refuse to authorise this work. That they are currently in breach of their lease.

Any advice would be gratefully received.
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.

Hi, Thank you for your question and welcome. My name is ***** ***** I will assist you. You are absolutely correct, the company is the landlord, the company's decisions are made by the directors or its shareholders. If this decision is within the remit of the board - which it is as it relates to consent under a lease - then consent can only be given if a board resolution is passed. Have you considered giving consent in return for the following: 1. The flat owner agreeing to a restrictive covenant that property wont be used as an HMO and will only used as a single dwelling for one family? 2. Consent would be conditional on the flat owner still giving his indemnity and making a contribution to any works that need to be done to the property, for example redecorating the common areas? I look forward to hearing from you. Kind regards AJ

Customer: replied 2 years ago.
Hi there

Thank you for your response. His flat originally had 1.5 bedrooms with one bathroom. The disturbance and noise levels were very acceptable when just two people lived there. But as leaseholders we have experienced the nuisance and noise created by four people living there (people he rented to after he and his partner moved out). The noise experienced by two of the leaseholders was too intrusive so we are keen to ensure that his property cannot be over-developed. We feel that two large double bedrooms and two bathrooms represents a compromise between putting it back to its original plan and his demand for 3 large bedrooms.

Thanks
Emma
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Well as you have rightly pointed out your are entitled to refuse consent if the board votes against it.

Have you considered asking him to sound proof the floor as well?

Kind regards

AJ
Customer: replied 2 years ago.
Hi there

Could you answer my second question, which is "Are they in breach of their lease?"

Thank you
Emma
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

They are in breach of their lease if they have made additions and alterations within the demised premises without consent.

Unfortunately without seeing what they have done it is difficult for me to directly comment.

If they were in breach of the lease, what would you want to rectify this? For them to reverse the works so far?

Kind regards

AJ
Customer: replied 2 years ago.
Hi there

The lease also states that:
"To do all such works as under any Act of Parliament or rule of law are directed necessary to be done on or in respect of the demised premises (whether by landlord, tenant, or occupier) and to keep the Lessor indeminfied agains all claims, demands and liabilities in respect thereof"

In addition to making alterations that they have not got permission to do the work does not meet building regulations. I believe they have therefore, breached both the clause above and the one that relates to getting consent for alterations,

Two of the directors would like them to correct the breach by reverting it to its original state, yes.

I was interested to have clarification on breach as I'm curious about the circumstances under which a leaseholder may risk forfeiting their lease. I am also curious about the circumstances under which it would be usual for a freeholder to charge a premium for an agreed alteration because of the increase in value to the property. Marriage value applies, I think, to additional bedrooms.


EB
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I would not worry about the second part, because if they have breached building regs, you have an indemnity for any fines and enforcement notices. Effectively the leaseholder will be liable for all those loses.

The marriage value is really only applicable to an extension and/or collective enfranchisement. You all already own the freehold, therefore it is only likely to affect the marriage value if the lease is renewed for this flat. This would have to be determined by a surveyor.

As for charging a premium - that really is totally up to you - the lease (from the information you have given) says nothing about "Unreasonably with holding consent" therefore if you did charge a premium, this money would go to the company and you would then have to distribute it among the members or use it for maintenance - so in event that flat owner will probably benefit from it.

Why dont you ask the leasehold to pay for a surveyor and valuer to come and provide a professional opinion on what the effect on the value of the property will be - so then if you are going to consent it is an informed decision.

Kind regards

AJ
Alex J., Solicitor
Category: Law
Satisfied Customers: 3557
Experience: Solicitors 2 years plus PQE
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