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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 9318
Experience:  I have been practising for 30 years.
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I just bought a mansion flat, a building of 78 flats,

Resolved Question:

I just bought a mansion flat, a building of 78 flats, suffered subsidence; £2m underpinning work was completed in 2013. There are certificate for the completion and insurance in place. The exterior and communal area decoration work for £1m budget, which is the final major work, started and been scheduled to finish in 8months.
I would like to make alternations to the layout, but facing disagreement from the management company.
Restriction from management company, see attached relevant pages in the management pack. The lease agreement has the usual clause that tenants are to abide by rules by the management company.
Our intention
Would like to remove a load bearing wall and make alternations to the layout. We have received advice from a licensed engineer and they have created a design, adding a beam, and signed off on this change.
There are many precedents in the building of the same exact change in several other flats.
The management company has refused granting permission to do this change, as well as another change for expanding the bathroom.
Please find response from the management company attached
1. Do we have any remedy here, what would be the process for challenging their response? E.g., is there a legal proceeding we could pursue and where?
2. According to the wording of the lease granting of such permission is purely at their discretion. Is there a reasonableness test to be applied to their refusal? I.e. Would we have any basis for challenging this?
3. What would be a high level estimate for the legal costs and the timeline to a decisions?
4. Assuming we are willing to spend the money and time on this, what is the likelihood of success given the circumstances?
Response from the management company
1. As you know, the building is affected by subsidence damage which affects the front elevation of the building and the front rooms of flats. Based on advice from our consultants and having regard to the insurance claim relating to the subsidence issue, a decision has been taken not to permit the removal of the wall dividing the two front rooms. I appreciate that historically this wall has been removed in other flats but the management company does not consider that it is in the best interests of the building (and ultimately leaseholders) for this practice to continue.
2. We understand that one of the walls proposed to be removed is part of the original chimney stack/fireplace where historically the coal fired kitchen range would have been located. The proposal is to reinstate this wall and open up the other side to allow the bathroom sink to sit within the new alcove. This proposal has very significant structural implications and would involve disturbing the chimney stacks where some of the flues may be live or where owners may wish to make them live in the future. I regret that this proposal will not be permitted as the management company cannot allow disturbance to the chimney stacks. This is a very sensitive issue in the building as there was a near fatality from carbon monoxide poisoning related to the chimney flues.
Submitted: 11 months ago.
Category: Law
Customer: replied 11 months ago.
I tried to attach a file but doesn't work.
Expert:  F E Smith replied 11 months ago.

Were the other walls in the other flats removed before the subsidence was remedied?

Would you and your buildings insurer and contractors insurer be prepared to give a full without limit of indemnity in respect of any further subsidence claims or any other structural claims in respect of the property?

Have they provided you with a copy of their structural consultants report?

Have they said or confirmed or do you know whether the insurers after the structural remedial work have confirmed whether they would continue to insure the building if your structural changes have been made?

It’s worthwhile making the point that if the chimney stacks are leaking, they need lining which is not your responsibility but the responsibility of the freeholder/management company.

Customer: replied 11 months ago.
Hi -- thanks for the questions.
+ No, the walls in other flats were removed before the subsidence
+ I don't think so, the costs of a further claim could be in the millions
+ Yes we have sent the structural report to the management company
+ Yes the building is now insured after the subsidence remedial work
Expert:  F E Smith replied 11 months ago.

Three final questions, with regard to the provision in the lease does it say that you can’t make structural alterations without consent there does it go on to say that consent cannot be unreasonably withheld (or delayed) or is there no mention of consent in respect of structural alterations?

Suppose the structural engineers got it wrong and this caused further problems, who would pay for that?

Is there any suggestion that any of the previous structural alterations caused the problem which needed fixing?

Customer: replied 11 months ago.
+ The lease includes a term that says alteration consent cannot be unreasonably withheld or delayed. But the management pack, which sets out the detailed rules for alterations (by the management company), has no mention of reasonableness for refusal, and says consent is to the discretion of the management company
+ Suspect the insurance company behind the structural engineer would need to cover that (professional indemnity)
+ No suggestion of past issues with alteration
Expert:  F E Smith replied 11 months ago.

Thank you. The part about not reasonably withholding or delaying helps you. If that wasn’t in there about not being unreasonably withheld or delayed, they could simply refuse without explanation however unreasonable it is.

You need to ignore the management pack, it is the lease which is relevant.

This comes down quite simply to whether the management company are being unreasonable in refusing this.

We then have the battle of the experts. Your surveyor will say that this is not a problem. The management company surveyor (which you are responsible for the cost of) will say that it is a problem.

To answer your 4 questions directly.

{C}1 if they will simply not budge, you are faced with taking the matter to tribunal

{C}2 there is indeed the test of reasonableness in the lease, the management pack isn’t relevant

{C}3 estimating costs is always difficult but if you are going to tribunal, you need to be prepared to lose whatever your loan legal costs are probably between £10,000 and £20,000 for the management company’s costs. It’s likely that they will not want to risk those costs so they will not go to tribunal unless they are pretty sure they are going to win. These things do not resolve in months and it could be 12 months or even more before it got to trial

{C}4 I think you have a 50% chance at best.

The problem you face here is the historical subsidence of the property although whether that is relevant or not would depend on whether there is any suggestion or allegation that any of the previous works contributed to the movement.

If the chimney stack leakage is a problem, although I don’t know whether it’s relevant because I don’t know the layout and I am not a structural engineer, it is something that they are responsible for although that is a separate issue.

Whether you win or lose at tribunal would depend purely on which version of the evidence the court believes.

It is likely that in the event that this goes ahead, there is going to be a substantial specific insurance provision which would be a condition of the consent.

Can I assist you any further with this?

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We can still exchange emails if anything needs clarification.

Best wishes.


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