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Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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In our block of nine flats a leaseholder sought permission

Customer Question

In our block of nine flats a leaseholder sought permission to convert his duplex into two flats. He needed consent from the Freehold Co (owned by other residents). The Freehold Co initially responded to the applicant's solicitor stating that four directors were in favour of his application and only two against. The applicant then proceeded to order architect's drawings and submit his applcation to the local authority. Subsequently, two directors of the Freehold Co changed their minds and the board of directors ordered that the Freehold Co's permission be not granted. It was argued that the initial response to the applicant's solitor was not binding.
Will the applicant have a strong legal case to recover the costs he has incurred between the first positive response and the second negative response from the Freehold Co?
Submitted: 4 years ago.
Category: Property Law
Expert:  Ash replied 4 years ago.

AlexWatts2013 : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return.
AlexWatts2013 : For what reason did they change their mind please?
JACUSTOMER-6sroltif- :

One said she did not realise the importance of her first vote and the other gave no reason for changing her mind. They both capitulated to pressure from a third director who is opposed to the application.

AlexWatts2013 : I am sorry to hear that they have changed their minds. In my view had it not been for the communication of acceptance of yor proposal then you would not have incurred these costs. In my view given your reliance on the communication and the subsequent change of mind it would be more than reasonable for them to pay your wasted costs.
AlexWatts2013 : If they would have said no straight away you would not have had the work done. You relied on their response and as such if they changed their mind you should be put back in the same position financially as had they said no.
AlexWatts2013 : So yes, I am of the view that you do have a claim against them for the reasons above.
AlexWatts2013 : Can I clarify anything for you? Alex
JACUSTOMER-6sroltif- :

I am not the offended applicant, but another director of the Freehold Co. I am apprehensive that the company will be landed with costs and that I will suffer a loss along with other directors. Will you kindly re-phrase your reply from the perpective of the Freehold Co. Many thanks.

AlexWatts2013 : Of course. The management Co will be responsible for the costs of the appellant. This is because had it not been for the intiial agreement then he/she would not have incurred those additional costs. If the appellant was minded to they could actually sue for breach of contract and insist that the original agreement is upheld. This is because they reasonably relied on the representations that the proposition was not opposed. Had it been opposed then they would not have incurred any extra costs. As it was the management co that changed their mind the case for paying reasonable wasted costs is strong.
AlexWatts2013 : Does this assist you in your question? Alex