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Licence for Alterations, Loft Conversions

Jul 27, 2022

Thank you for clicking on today’s property surveying blog post.  Today we are going to be looking at Licence for Alterations proceedings.

Licence for Alterations proceedings are required when a leaseholder plans to undertake any form of alteration, development, structural works or change to the property.

Under the terms of their lease, and the landlord & Tenant Act 1954, a leaseholder will need to obtain the written consent from their landlord/freeholder in advance of progressing or commencing any works to their leasehold property and demise.

Commonly, for leaseholders who have the benefit of a top floor flat, often in a converted building, one of the most common forms of work undertaken will be creating a mansard, or loft conversion.

Loft conversions not only have the benefit of adding all important floor space, and floor area to the flat, they are also a relatively straightforward form of construction work, whilst there is a degree of structural complexity, it tends to be towards the lower end of the spectrum.

This makes it a very appealing type of construction work for leaseholders to undertake.  

Unbeknown to a lot of leaseholders, while there may be loft hatches in their flat or demise, in many cases, these loft hatches may not actually be into spaces that the leaseholder actually owns as part of their demise.

Instead, while the flat itself will be as in the leaseholders’ demise and ownership, the roof space above it will often still be retained by the freeholder.

In practice, this means that if the leaseholder wants to convert and extend into the loft space in order to create their new room, they will need to not only gain the permission from the freeholder, they will also need to go through the process of purchasing the space from the freeholder.

The purchase of areas within a property that are outside of the leaseholder’s demise can be tricky.  Firstly, the leaseholder will need to employ an RICS registered valuer to value the space in question.  They will then need to agree the premium to be paid to the freeholder for the sale of that space.

The manner in which the valuation will be calculated tends to be the end value of the floor space, less the construction costs in order to get to the final end value.

This can obviously mean that in your more central and high value areas of England and Wales, the end figure payable by the leaseholder to the freeholder can be quite significant.

For leaseholders that are unaware this, they often find this out very late in the process and usually, post having instructed architects, surveyors, planning consultants, engineers and Building Regulations inspectors.

Here at Stokemont, we would advise that before any planned works are progressed and the various procedures that come before the actual construction works are implemented, that a leaseholder fully and carefully checks their lease.  It would also be advisable that the leaseholder seeks legal input at lease review stage, as this will ensure that they are not reviewing the terms of the lease from a layman’s perspective, however, instead from the informed position of a legal advisor.

It should be also be noted that while the leaseholder can purchase the space in question, if the leaseholder and freeholder are unable to agree on the value of that space, the only real vessel for resolution will be First Tier Tribunal.

The First Tier Tribunal is not only an incredibly costly process for a leaseholder to embark on, they also bear a cross risk in the sense that if the Tribunal agrees with the freeholder’s valuation, the leaseholder will need to bear the costs that the freeholder has incurred in progressing with the Tribunal in the first place.

Here at Stokemont, we are very proud to offer a free lease review service which we do so in the hope that upon review, potential clients and leaseholders will be fully informed of their rights to undertake works to their property, whilst also having a full understanding of what they can and can’t do.

If you would like to take us up on this offer, all you need to do is pop over a copy of the lease and your plans setting out any proposed works and we will happily review those and provide you with some further advice.

Licence for Alterations procedures, while at face value appear to be relatively straightforward, are riddled with potential issue.  This is never more prevalent than when a leaseholder is attempting to purchase space outside of their leasehold demise. 

If you would like to discuss your leasehold alterations procedures with our team of qualified and experienced RICS registered valuers and RICS Chartered Surveyors, please feel free to give us a call today and we will be more than happy to assist and advise you.

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