In today’s Property Surveying blog post topic, we are going to be taking a closer look at licence for alterations procedures.
Licence for alterations, also known as a licence to alter, or licence of alteration is required to almost all leasehold properties within England and Wales.
The requirements to go through the licence alterations are very much governed by the Landlord and Tenant Act 1954, and in almost all cases the licence for alteration procedures will be dictated by the lease’s alterations covenant.
Generally speaking there are three different types of alteration covenants that we tend to see throughout the majority of leases.
Fully Qualified Covenants
A fully qualified covenant allows the leaseholder to undertake their proposed works, however confirms that they must obtain the written consent and licence from their freeholder.
Importantly, the clause confirms that the freeholder cannot unreasonably withhold consent.
This effectively means that so long as the leaseholder goes through the necessary procedures and has the necessary information to hand, their freeholder cannot stop, delay, or withhold permission for their works.
Qualified Covenant
A qualified covenant is similar to a fully qualified covenant, however the only difference being that the freeholder doesn’t need to give consent.
This effectively means that the freehold can opt to refuse the proposed works or alterations.
Furthermore, the freeholder would not need to provide any justification or reasoning for the refusal, and can simply rely back to the wording of the lease itself.
While it is relatively rare for freeholders to flat refuse works, here at Stokemont, we do tend to see freeholders levying premiums, uplifts in costs in order to grant the licence and other financial provisions which will ultimately hit the pockets of the leaseholder.
Absolute Covenant
An absolute covenant is the worst type of leasehold covenant that a leaseholder can find within their lease.
It effectively means that they cannot undertake the alterations works to their property, and in almost all cases will actually need to reconsider the proposals in their entirety.
While absolute covenants are relatively rare, as they tend to find themselves worded out of leases through the normal lease amendments or extensions, they are still present out there.
Effectively this covenant would remove any chance of works being undertaken to the subject flat and demise.
One of the most typical questions we are asked here at Stokemont, is whether a leaseholder needs to pay their freeholder’s costs in administering and granting the licence for alterations.
Simply worded, yes, the leaseholder does need to bear the costs of their freeholder in going through the licence for alterations procedures.
These costs, however, will need to be reasonable, and in many cases are likely to be restricted to the costs of a surveyor to review the proposals, a cost of a solicitor to advise, and in some cases the cost of an engineer, acoustic tests, or other form of specialist input in order to ensure that the freeholder’s team is fully informed in respect of the proposed works.
We have seen many scenarios here at Stokemont where the freeholder’s charges are bordering on, if not excessive and high.
Unfortunately, it is not an uncommon situation, with many freeholders unwillingly employing incredibly expensive solicitors or surveyors who somewhat take advantage of the situation.
A good leaseholder’s surveyor will have a keen eye on these types of situations and ultimately ensure that the leaseholder only pays costs that are reasonable, and is not held to unreasonable costs and charges in that regard.
Licence for alteration procedures can be complicated at the best of times. In many cases leaseholders will rarely have the full pack of information required in order for a freeholder to make an informed licence for alterations permission.
In many cases the leaseholder’s architect or professional team will struggle with putting the information together.
Here at Stokemont, our advice would be to ensure that the requests that are received or made from the freeholder are always carefully considered, and rather than looking at them as barriers to permission, look at them as hurdles to overcome in order to get to the finish line.
Licence for alteration procedures are one of the many surveying services that our team of qualified and experienced surveyors undertake on a daily basis here at Stokemont.
If you would like to discuss how our team of property professionals can be of assistance to you, give us a call today and we would be more than happy to assist and advise you.
