Thank you for clicking on today’s Property Surveying blog post topic, through this week’s informative post we are going to be looking at licence for alteration procedures.
Within every lease set out in England and Wales, there is going to be some form of covenant or wording that governs and sets out how both the leaseholder and freeholder should deal with proposed changes to the property, also formerly known as alterations.
Licence for alterations works are far and wide, however generally speaking can include, albeit are not limited to;
- Changing doors and windows
- Changes to floor coverings
- Installations or additions of new kitchens or bathrooms (known as wet rooms)
- Removals of partitions and walls
- Structural alterations or changes
- Works to existing services (including electrics, gas and water)
The leaseholder’s property lease will set out procedures that need to be adhered to and followed if they plan on undertaking any form of these works.
Commonly, the lease will have an alterations clause or provision within it which confirms exactly what the leaseholder needs to do during the course of the alterations request and procedures in advance of the works commencing.
We are now going to take a brief look and overview of the different types of alterations covenants that can exist.
Fully Qualified Covenant
A fully qualified covenant is the most facilitating form of licence for alterations covenant.
The wording of the alterations covenant will have something along the lines of:
“works not to be undertaken without the permission/consent of the landlord, with that permission/consent not to be unreasonably withheld”
In layman’s terms, what this is saying is that the leasehold is going to be able to undertake the works, providing that they go through the necessary legal and procedural steps prior to those works commencing.
Importantly, it also sets out that the freeholder, or landlord under the Landlord and Tenant Act 1954, cannot refuse their works.
Furthermore, the permission for their works needs to be reasonably given and consent cannot be unreasonably withheld.
If you liken this to a traffic light, this would very much be a green light and as set out is indeed the most favourable outcome.
Qualified Covenant
Like a fully qualified covenant, a qualified covenant will include wording within they lease alterations clause along the lines of;
“Prior to commencing the works the leaseholder is to obtain the permission/consent from their landlord”
However, you will note that this does not have the added wording setting out that the consent is to not be unreasonably withheld.
In layman’s terms what this means is that the freeholder is likely to consider the alterations procedures, however there is no guarantee that they are going to give them to the leaseholder. Furthermore, they are not legally obliged to give them.
If you were to compare this to a traffic light, this would be an orange or an amber light.
Here at Stokemont over the years we have seen qualified covenants, with conditions such as the request of a freeholder’s licence for alterations premium, consent fee, or a cost attributed to the freeholder’s permission.
In simple terms, what this means is that the freeholder will grant the leaseholder the consent, however they will do so on the knowledge that they will be paid to do this.
If you do indeed have a qualified covenant, we would advise opening discussions with the freeholder sooner rather than later, preferably well in advance of having incurred the professional fees in respect of the proposed works.
This will ensure that you are not shelling out for costs such as architects, structural engineer’s designs, planning permissions, statutory building permissions such as Party Wall Notices and awards, Listed Building Consent, access licences or other associated fees.
Absolute Covenant
Unlike the aforementioned two covenants, an absolute covenant is wholly different and stands very much on its own and in isolation.
The absolute covenant will include wording within the lease’s alterations clause along the lines of;
“Alterations are not permitted”
What this effectively means, is that the leaseholder is unable to undertake any alterations works, with the lease specifically preventing the works from being able to progress.
Historically, freeholders were liberal or relaxed on this type of alterations covenant, and would often waive it, depart from it, or overlook it.
However as tends to be the way with legal procedures, recent case law has very changed the stance in which freeholders now review this.
Notably, the outcome of this case was that freeholders can be held liable should they choose to depart from the lease’s wording. With that liability extending to both current and future leaseholders.
You can therefore see the issue that can arise, especially if there is a leaseholder within the property who is especially against the idea of the works taking place, for whatever reason they may have in that regard.
An absolute covenant is very much the worst case scenario of an alterations covenant.
If you were to compare this to a traffic light this would very much be a red light.
If indeed you are unlucky enough to have an alterations covenant, we would advise that you take informed legal advice from a specialist conveyancing solicitor who has got experience and background in dealing with absolute alterations covenants, and ultimately, as unfortunate as it may be, we would advise that you prepare yourself for an ultimate works refusal in respect of your planned alterations works.
Here at Stokemont, over the years we have taken great pride in helping thousands of leaseholders and freeholders alike administer and complete licence for alterations procedures.
If you would like to discuss licence for alterations procedures and how we approach them thereby making them straightforward and facilitating, please feel free to give us a call today and we would be more than happy to assist and advise you.
