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Alterations Covenants in Leasehold Properties Explained

Mar 31, 2023


Hello and welcome to today’s property surveying blog post, in which we are going to be covering Licence to alterations procedures.

The aim of this blog post being to give you an overview of the differing alteration covenants that you may find within your lease.

What is a leasehold?

Firstly let us take a look at what is a leasehold property.

This is when you would have purchased the right to use a property for a set period of time. Each leasehold differing in that respect but can go so far as beyond 900 years.

However, when the lease expires the property would go back (or revert) to the freeholder, this being the person that owns the land that the property is built on. 

Under the Leasehold Reform Housing and Urban Development Act 1993, you have the right to extend your lease, however to gain this right, you must have owned the leasehold for at least 2 years before you are able to extend it.

What is an alteration covenant?

Alteration covenants will be written into every leasehold agreement throughout England and Wales that will give the leaseholder the right to conduct certain works and will restrict certain works entirely.

Generally, works that will be restricted under a lease will be those that would involve making structural alterations to the property which will include demolishing walls, changing the roof structure for a loft conversion, and even putting in new windows.

While less intrusive works that are more decorative i.e. painting or lining the walls with wallpaper tend not to be restricted within a lease.

Although not all covenants are created equally and some will be far more restrictive than others. The alteration covenants themselves can generally be broken down into 3 distinct types, a Fully Qualified covenant, a Qualified covenant, and an Absolute covenant.

With these 3 covenants, you could think of these as a traffic light system with the first covenant mentioned, the fully qualified being the least restrictive covenant.

Fully Qualified Covenant

This can then be seen as our green light and generally, if this covenant is within your lease you should have the right to conduct your planned works. Even if consent is needed before the planned works are able to begin, it will be written into the lease that this consent cannot be unreasonably withheld or refused.

Qualified Covenant

A qualified covenant is similar to an amber light on the traffic light scale. Unlike a fully qualified covenant the wording of the lease will mean that the freeholder is within their right to refuse any alterations and does not need to provide any reasoning for doing so. 

If your lease does have a qualified covenant within it, this would mean that if you wish to conduct any works then you would require the written consent of the landlord (typically this will come by way of a licence for alterations) prior to the planned works commencing.

Absolute Covenant

Finally, the last covenant that we will find in a leasehold is an absolute covenant, this is the most restrictive and so we can view this as a red light on the traffic light scale.

An absolute covenant will set out that any planned works and alterations not permissible within the lease without the express permission of the freeholder which they are capable of withholding for any reason they wish.

Also given recent case law it will be extremely unlike that a freeholder will grant permission in cases of an absolute covenant as they can be held accountable for doing so by other leaseholders both present and future.

I hope this gives you further insight into the differing alteration covenants and license for Alterations.

If you have any further questions in regards to today’s property surveying blog post or any of the other services that we offer here at Stokemont. Please do not hesitate to get in touch today by either popping us over an email or giving us a call and one of your team of the experienced surveyor will be happy to assist and advise.

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