Landlord and Tenant Services: Got A Licence to Alter?
Prince Krofa & Sons explains consents and procedures that may be required if you own a leasehold property and would like to carry out structural or non-structural works to improve it.
When do I need a licence for alterations?
This often depends on individual tenant’s lease, and on the scope and length of time the works require, as well as the number of beneficiaries to the leaseholder’s alterations. The most common examples include:
Altering the structure
Making internal layout alterations
Installing new sanitary facilities, such as a ground floor bathroom for accessibility purposes
Changing size / position of windows and doors
Replacing carpet with wooden flooring (and vice versa)
Installing a new boiler, fuse box or power supply.
If there are no clauses in the lease specifically stating that certain works require permission, it may be possible to undergo these works without it, but a lack of consent where permission is required could cause the landlord to take enforceable action, which may result in penalty costs and challenges on future sales of the property once your lease terminates.
Therefore, it is important to check through the smallprint of the lease to make sure permission is required, and if you are still unsure, talk to your landlord.
What are the possible restrictions on alterations to a leasehold property?
If there are restrictions, they will most likely fall into one of these three categories:
“Absolute Covenant” (all alterations are prohibited apart from exceptional circumstances unless the landlord decides waive its enforcement)
“Qualified Covenant” (alterations are permitted with landlord’s consent)
“Fully Qualified Covenant” (the same as a Qualified Covenant, but also states that a landlord’s consent should not be “unreasonably withheld”).
Again, checking the exact wording of the lease is beneficial, and will give you confidence when obtaining consent.
What is the procedure for obtaining landlord’s approval?
The first step, unsurprisingly, is to notify the landlord of the exact proposed changes.
If there are few restrictions in the lease, most landlords will approve works intending to modernise the flat or those affecting non-loadbearing structures, as these will often result in an improvement in the value of the freehold. However, works that would alter loadbearing structures or move outside the tenant’s area of ownership (the demise), such as fitting a balcony or altering the roof, would be more difficult to approve and regulate.
The next step is to contact a solicitor, agree terms and complete the “licence for alteration”. This document is usually prepared by the landlord’s surveyor, and will usually require all of the following:
Detailed plans, sections and elevations, that include: the works themselves, ideally at a 1:50 scale, structural engineer’s details and calculations, amd description of how the works will affect loadbearing structures, plumbing and gas pipes (the clearer the drawings, the faster consent can be granted).
Timescales for the start and finish of works
A commitment to carrying out the works in line with building and planning regulations
Consent from the building insurer to meet the cost of additional premium before works begin
The landlord’s surveyor will inspect before, during and after completion of the works, to ensure that the works are carried out strictly in accordance with the licence granted. If they are not, a landlord can withdraw the licence, potentially opening the tenant up to forfeiture costs.
What other permissions may be needed?
Before building work can commence, there may be a number of other permissions a tenant will need to obtain, including:
If the landlord has placed a headlessor in charge of direct negotiations with tenants. This is the case with some, but not all, freehold landlords.
Listed Building consent
If the building is listed by English Heritage.
If the use or external appearance of the property are going to be altered.
Building Control approval
If the works will affect matters covered by Building Regulations, such as structural safety, fire safety, weather tightness, sound insulation, drainage and waste disposal, thermal insulation and general materials and workmanship.
Deed of Variation consent
If the works result in a variation to the extent of the property, a request will be needed to vary the lease by “deed of variation” to reflect the property’s new dimensions.
Party Wall approval
If the works will affect party structures such as adjoining walls and floors (PKS has a series of articles on these matters).
Bank / Mortgagee approval
If the property is mortgaged or otherwise secured for loan purposes.
How much will it cost?
The landlord’s surveyor and solicitor will be monitoring throughout the process that legal and survey costs, as well as the tenant’s overall costs, are met.
Harris Associates state that a tightly-drawn plan and specification can give an accurate prediction of building costs with an average of less than 10% discrepancy, usually for unforeseen or additional work costs before commencement.
The final cost to the tenant will depend on the specific property and works, as well as the effect on the eventual valuation of the amended property, and will include:
Surveyor / solicitor fees
Architect / structural engineer fees
Planning / Listed Building / Building Control consent fees (local authority charge + surveyor fees – if applicable)
Party Wall Award fees (if applicable)
VAT on fees / building work (some or all may be recoverable on a listed building)
Alternative accommodation costs while works are taking place.
What can you expect from Prince Krofa & Sons when assisting with licences for alteration?
Prince Krofa & Sons are trained in providing technical guidance to both landlords and tenants on leasehold alterations to existing buildings. We will identify and analyse requests, assess the risk, and assist with establishing a strategic way forward.
We work to establish a solid relationship in the interest of our clients, and our services go right the way from commencement to completion of works. Our services include an initial review of tenant proposals, schedule of condition reports, monitoring a tenant’s commitments and documentation, signing off works on completion and ensuring all works are carried out in accordance with the licence to alter.
If you are in London or the Home Counties, Prince Krofa & Sons can help you. For enquiries, or to book a survey, contact us here. Sign up to our newsletter for all the latest business and company news. You can also find regular updates on Facebook, Instagram and LinkedIn (links in top right-hand corner).