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HomePersonalLandlordsLoft Conversion Leasehold Flats – Legal Pitfalls

Loft Conversion Leasehold Flats – Legal Pitfalls

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If you are thinking about adding value by expanding your flat into the loft space above then you will need to be careful that you obtain all the legal rights and consents you need from the freeholder (even if you have a share of freehold) before embarking on the expensive process of conversion.

Even forums purporting to provide legal advice sometimes appear to miss the pitfalls.

 

 

1. You do not own the loft.

Most leases do not include the loft space in the “demise” of the lease. This means you do not own it or have any rights to use it. This is often the fundamental problem.

Even if you use the loft space for storage you may or may not have a right to do so under the lease terms and in any event a right to use for storage does not lead you to ownership of this area even though you may be the only owner who physically has access to the space.

A landlord will normally be aware of the potential value of the loft space. There is no way of forcing him to sell. Sometimes it is worth considering purchasing the freehold with other tenants to obtain this space rather than negotiate terms with a difficult landlord.

 

2. You do not own the airspace around the roof space

Even if you own the loft space you may not own the area outside the structure of the building. This may be okay if you only require velux style windows for the conversion but if you want to build out e.g. by installing dormer windows or a balcony structure you will need to own this space also. Sometime this is implied by the lease terms but very much will turn on the exact wording.

Many deeds which purport to include the loft area miss this point.

 

3. You do not have Landlord’s consent for the required structural changes.

Most leases will restrict changes to the flat. Often minor non structural changes are  permitted with the landlord’s consent such consent not to be unreasonable withheld however structual changes (which would be required for a loft conversion) may be prohibited or only permitted with the landlord’s consent. The landlord does not have to be reasonable in deciding whether or not to grant that consent.

Sometime changes to pipes and wires running though the building will also require consent.

The landlord will have legitimate concerns that any changes to the building will not have an adverse effect on the remainder of the building although any such changes are likely to require building regulations approval and the council will oversee the works.

 

4. You may be interfering with other rights in the building

There may be services or other communal systems e.g. water tanks in the loft space. These may need to be relocated interfereing with the rights of other tenants.

You may want to erect scaffolding to enable the work to be carried out – specific rights should be provided for to enable you to carry out the work.

 

5. You will need to consider the repair obligations for the building in particular concerning the roof

The roof may be maintained at a communal cost. If you make changes to it the cost of repairing may increase because the roof structure is more expensive to repair. This is sometimes offset by the fact that the upper flat owner is completly replacing or refurbishing the roof and not passing on any of the cost to the other tenants/freeholder. Often we see situations where the tenant is offered the loft space for conversion where they take on this repair responsibility forever more. Each matter can turn on its own circumstances.

In addition you are changing the floor area of the flat – sometimes doubling it – you would need to consider whether the existing division of the service charge/insurance is correct, for example, in a building with two flats will the old 50:50 split turn into 1/3 : 2/3.

 

5. You assume that a share of freehold equates to consent – it does not.

Even where you own a share of the freehold the other co-owners are not bound to consent to such an arrangement. You still have to deal with the lease and obtain the necessary consents from your co-owners. Some times this can be trickier than dealing with a third party landlord.

 

 

If you are considering such work it is important you obtain correct advice on the terms of your lease and the agreements you need to seek to achieve your goal. We provide initial opinions on your lease terms from £350 plus VAT and lease variations and licences for alterations from £500 plus VAT. For further details contact Mark Sadler on 01708 757575 or email mbs@ker.co.uk for further assistance.

 

32 comments on “Loft Conversion Leasehold Flats – Legal Pitfalls

Reply

I note your suggestion of the obligation of the maintenance/ insurance for two flats. What is the likely split for three flats where it has been 1/3 each? How is this calculated – floor area of each flat, increased value of each or other?

Mark Sadler Post author
Reply

Floor area is usually accepted as a reasonable way to apportion service charge and insurance liabilities. The flat value has no real bearing.

Reply

I live in a first floor detached maisonette. I have the only access to the attic which I have converted into a hobby room. How much would the costs appx be to alter the deeds to specify loft is my domain if I’m willing to consider roof my responsibility too. The lease also has 140 yes left, but land registry wernt informed ten yrs ago when I purchased the maisonette with renewed lease. It is in my name at the registry, and they told me what forms to download , which I have. Also they said with a covering letter explaining my solicitor didn’t inform them it had been renewed by the vendors, they would accept the documents. I may need a hand filling them in correctly though.

Regards

Steve

    Mark Sadler Post author
    Reply

    You would need to obtain your solicitors old file because if the Land Registry do not have the correct records this may be a problem. Your existing solicitors should fix this problem without charge.

    The roof space may belong to the Landlord so you may have to purchase this from him and he does not have to sell it to you. Even if the loft space is part of your flat demise then you may nee his consent to convert it (retrospectively). We would need to consider your lease to give you a more precise answer.

Reply

How would a boiler in the loftspace be viewed by the freeholder if found whilst surveying for a lease extension?My lease makes no reference to the loftspace. What is the worst that can happen if they take offence to it? Thanks!

    Mark Sadler Post author
    Reply

    He may attempt to charge you for using an area outside your demise or ask you to remove it. I have seen examples where landlords have attempted to charge tenants for adding new flues to their boilers which extend through the structural walls and out into the airspace surrounding the building! It depends therefore on how ‘tricky’ the Landlord is.

Reply

I own a first floor leasehold flat in a two storey Victorian house. I have recently bought the Freehold of the whole property. Would this entitle me to have sole use of the roof space (conversion) without the permission from the lessee downstairs.

    Mark Sadler Post author
    Reply

    You can grant the consent to the conversion of the loft space to yourself so effectively you do not need consent of the lessee downstairs for the work unless there is something specific in their lease (this would be very unusual).

    However you may need their consent to erect scaffolding etc around the building to carry out the work if not reserved in their lease as a right for the landlord or the upper tenant (you). Sometimes this right is included in the lease but it may only apply to repairs not to alterations or additions. Further advice may be required on the lease terms.

    You may also need to include the loft space into your lease demise (and you need to be careful to avoid any right of first refusal applying – this can be done by transferring to and from family members).

Reply

I live in an old terrace house split into two flats, I’m on the first floor. Rather than deal with the difficult LL i just asked to buy the FH. They have said they need something in writing from both leaseholders agreeing to the purchase but I cannot get hold of the downstairs neighbour. Can this notification be done under a Section 5 notice instead?

    Mark Sadler Post author
    Reply

    The Landlord can of course serve a section 5 notice (right of first refusal). This will set out the minimum price the landlord will sell the freehold for and enable the majority of the tenants (in the case of a block of 2 this needs to be both of you) to purchase the freehold before he sells elsewhere.

    On the assumption the lower tenant does not respond the Landlord is free to sell you the freehold for the price set out in the notice in your sole name. Even if the lower tenant does respond to the notice, he cannot, without your co-operation, acquire the freehold this way. But beware in this case that the lower tenant doesn’t offer a higher bid to the landlord and buy it from under your nose!

Reply

Dear please leat me know what can I do? I bought my maisonette 3 years ago. The lease has 97 years left. The freeholder doesn’t want to give a permission to do a loft conversion. What can I do in this sytuation?
Thank you

    Mark Sadler Post author
    Reply

    You need to establish what you are asking the freeholder to do. Do you own the loft space? Your lease should make this clear. If not you need to acquire the space from the landlord. He may ask for a payment for this.

    If you already own the space you need to check the lease to establish if the landlord’s consent is required to the works and whether he needs to be reasonable about considering your application for consent. Again the lease terms may be different from one flat to another so carefully check the lease.

    If after all those steps have been taken you may still need to apply to Court for a declaration that the landlord is unreasonably withholding his consent. Clearly you need some professional advice.

Reply

My upstairs neighbors have approached me asking if I would consider buying the freehold with them. They also mentioned that they have a strong interest in developing into the loft space, and have proposed that the lease be amended so that they take sole responsibility for loft, maintenance costs included. Does this seem like a fair trade? What is your advice?

    Mark Sadler Post author
    Reply

    It can be a fair trade because if you do not purchase the freehold together the upper neighbour can of course do a deal with the landlord direct and you would still have an upper loft conversion. You will still be laibly to contribute to the roof costs in those circumstances.

    However if values are high in your area there may be significant value in the loft space so you may need to consider the detail. You may be providing a way for the upper tenant to buy this space more cheaply than approaching the landlord.

    Also make sure if your lease is short that you have agreement to extend the lease immediately on acquisition of the freehold.

Edd
Reply

If I am the sole freeholder and own the first floor flat and in the lease there is no mention about ownership of loft but only shared maintenance can the ground floor flat lessee prevent me from demising the loft and airspace to my lease?

    Mark Sadler Post author
    Reply

    If there are no specific rights in his lease to use the roof space then the short answer is no.

    However depending on your circumstances you might need to comply with the right of first refusal rules in the Landlord and Tenant Act 1987 as amended by the Housing Act 1996 which can apply to any disposal made of common parts which usually includes the loft space.

    You may be exempt under the ‘resident landlord’ exemption however this is quite limited. Both conditions below need to be satisfied:
    1. the building is not a purpose-built block of flats e.g. a house which has been converted into flats since its original construction; and
    2. you genuinely live in the building as you only or principal residence and you have done so for more than 12 months.

    If you are not exempt there are other possible exemptions or ways around the act however basically it would be simpler to serve a notice as he/she cannot get the requisite majority to stop you from making the disposal. You just have to wait a couple of months before formally completing the variation to your lease.

Reply

Hi Mark. I am a leaseholder in a first floor flat, with a long lease. I have a sizeable loft which I have asked the freeholder (a not for profit housing association) to provide me with a quote to purchase the loft so that I can convert it to habitable space.
They have instructed a surveyor, who has used the following calculation to determine the premium: Future value of flat including loft space, less any associated costs, less the current value of the flat = premium for loft void. This would split the profit 50:50. I understand that there is no set in stone method, and this method is deemed to be appropriate by a lot of professionals in the industry.

My frustration is that the surveyor has clearly undervalued the current flat and used a very inflated figure for the future value of the flat (if looking at similar properties in the area) – which leaves an inflated figure to purchase the roof void.

Despite giving clear evidence of properties in the area, the surveyor has refused to amend their valuation and the freeholder has said that they will only listen to what their surveyor has quoted.

Is there anything I can do here?

thanks

Mike

    Mark Sadler Post author
    Reply

    The landlord is not obliged to sell to you. If you can purchase the freehold through the collective enfranchisement regime you may be able to use the process to force a negotiation of the development value as part of the overall calculation of the freehold value. You need to have a clear agreement with the lower flat owner about the reasons for the freehold purchase and ensure that you will be able to include the roof space in your demise and develop out post completion.

Reply

I own a top floor flat in a converted Victorian house, and together with the ground floor flat owner we both own the freehold to the property. I have lived there since 1995, use the loft for storage, and the only access to the loft space is via my flat.

I have checked the original lease (as far as I recall no new lease was drawn up when we became joint freeholders) and can see no mention of the loft being demised to me.

Can I argue that by virtue of the loft being used by me and having sole access to it that I it is somehow automatically demised to me?

If not, could my co-freeholder refuse to grant a change to the lease to allow the demise of the loft to be granted solely to me?

Dan
Reply

Hi

– Pls can anyone advise on ‘adverse possession’ chances in this situation

I am Leaseholder of a flat (1 of 3 in a period house)

– My lease term was recently extended back to 99 years. There were no change to the existing lease terms

– My flat is top floor and has sole and only access to the roof (4 storey property – no rear access)

– I installed stairs about 15 years ago to give me easy direct access to the loft and have boarded it out and have been using the loft as a work area. I did not install windows.
– My lease states nothing above the ceiling or below the floorboards is mine. Otherwise, there is no mention of the loft being used or not. The flat was constructed with a direct hatch opening and access to the loft from my flat.

Questions:

Do I have strong enough grounds for ‘adverse possession’?

2. Presumably, even if I was able to seek ownership this way, I would still need freeholder consent to convert the space as my lease requires freeholder approval (not to be unreasonably withheld)

3. The roof needs a full tile replacement at a considerable cost. (A Section 20 Notice served for roof tile replacement without roof inspection). Would it be unreasonable for the landlord to withhold consent to change the rear of the roof to a standard dormer (instead of sloped), if the dormer would cost less than the freeholders own very expensive quotes to replace the existing roof and and if I provide an opening skylight, it will provide future access to the roof for ongoing maintenance work, without the need to erect 4 storeys of scaffold (as we have to do now. for any roof & gutter repairs).

Pat
Reply

Hi There
I own a ground floor maisonette, neighbours above want to convert and build up into the loft. it won’t be a straight forward loft conversation and they are building up and extending the roof upwards. Part of my Demise is the foundations of the building and the internal and external walls and joists of my property. My question is can the freeholders give permission for this without my consent as the extension of this loft could have implications on my demise mainly the foundations?
Thank you.

Reply

Hi Mark, I am a leaseholder in a first floor flat. My flat is let to tenants. There is also a studio flat on the first floor and a flat with garden and access to a basement on the ground floor. My flat and the studio flat have both access to the loft area. All three leaseholders own a share of the freehold. The owner of the studio flat converted the loft shortly after purchasing the flat. They did not seek consent from the other freeholders and maintain they didn’t need planning permission as they have not made any structural changes but put in three Velux windows. The studio flat owner wants to sell but has encountered difficulties due to lack of planning permission etc. and is now asking the other freeholders to sign a Deed of Variation. It was our intention to enter into a Declaration of Trust regarding the freehold but we are uncertain as to the common areas; particularly the loft space. There is no mention of the loft space in the lease. What is your view? Thanks. Gertrud

    Mark Sadler Post author
    Reply

    It is not possible to answer this without seeing all three leases but the problems encountered by the neighbour on sale indicate the deeds are not clear.

    It therefore depends on what you said or agreed at the time of the conversion. If you had access to the roof space was that blocked and did you not object?

    It may be that you could ask for a payment for the variation to the lease but that depends on a lot of factors.

    What is the value of the flat in question.

    It is also difficult to see how velux installation did not involve an element of structural change as unless they are very small then the rafters of the roof are often cut. These are clearly structural. Further to properly install a staircase into and a new floor to a loft conversion there may be an element of cutting and or strengthening to the joists. Was there any building regulations for this work?

    It may be appropriate for you to ask for your neighbour to cover your fees to consider the terms of his lease and the proposed variation. I would ask for an undertaking for those costs to be paid whether or not you agree to the variation.

Reply

Hi Mark,
I am a top flat leaseholder in a property of 5 flats. There are 2 other leaseholders (Flat 4 below and Flat 2 garden flat). The other 2 flats are still owned by the existing freeholder. There is also a loft space above which I am interested in acquiring and converting into some sort of habitable space. Note, my current lease does not include the loft space as ‘demised property’, but the freeholder has allowed me access to the space for storage.
Last month, the freeholder served each of the leaseholders (including myself) a notice (right of first refusal) with the intention of selling a share of freehold – which I am also interested in and am have started initial talks with the other 2 leaseholders.
How should I go about it and to whom should I speak first – the freeholder or the other leaseholders? In theory it sounds like a great opportunity to have a share of the freehold and also the loft. Can I make an offer to the F/H for the loft separately or is it better to buy it via share of freehold?
Thanks

    Mark Sadler Post author
    Reply

    It may be better to acquire the loft from the freeholder as you are only negotiating with one person not three. It could be difficult to get this through even if only one of your co-freeholders objected so I would rather deal with the freeholder alone. Clearly any agreement to sell the space should also include the consent to carry out the works.

      Reply

      Thanks Mark. How should I go about estimating how much to offer to the freeholder? I’ve reached out to many surveyors but noone is willing to carry out a valuation for the loft only. Thanks

        Mark Sadler Post author
        Reply

        There is no set method. Some landlords take a lump sum (£10,000 seems a popular figure for no apparent reason that I can see) or a percentage of the value released as a result of the development (for example added value to the flat less build costs x Y%). Y often being between 30 – 50%. Some councils use this.

        Other valuations for this type of thing exist within collective enfranchisement valuation where the landlord claims this a a head of loss but that is usually heavily discounted because if the tenant has any sense at that point they have not even indicated they want to extend and have not obtained planning permission so there is a risk that planning may not be obtained.

Reply

I owned the lease hold Ida ground floor flat. The FH owner the top floor plus loft. 2 weeks a go he contacted me for money. He discovered the his loft extension was made using not the main walls as support but the front wall of the property.
My question is, I am responsible for the roof but why should I pay for a mistake on his property?

    Mark Sadler Post author
    Reply

    The lease would determine what you are required to pay but this is a service charge issue and not my area. You may however be required to fix inherent (hidden) defects in the building under most lease terms.

Reply

Hi,
I am looking to buy a first floor flat (leasehold) and that flat already has a loft conversion which the previous owner did (the owner before the one I’m buying from). Does this mean I am safe to use the loft conversion legally?

    Mark Sadler Post author
    Reply

    This should be part of the standard checks made by your conveyancing lawyer – does the conversion have planning permission (flats do not have permitted development rights like freehold houses), building regulations completion certificates, landlords consent and is the loft space within the demise of the flats?

      Reply

      Ok that makes sense. So if it does not have permission from the freeholder can usage be established without permission if has been being used for more say 10 years or would you still have get permission from the freeholder. If the freeholder does not give permission I you have to take any action since I did not convert the loft in the first place?

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