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Author: JocktheScot Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 69811  
Subject: Share of Freehold - Permission for Extension? Date: 16/07/2007 09:27
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Morning all,

A quick question.
We own the ground floor flat 'share of freehold' with the upstairs flat. I.E there are just 2 flats in the building.
We have just had planning permission granted for a side/rear extension and have served the relevant party wall notices on neighbours etc.

My question is - do we require permission from the owners of the flat above to do the extension? There is nothing detailing this in our lease that I can see, and certainly nothing preventing extensions.
I don't think it would be an issued getting permission from them, but i would prefer not to have to rely on it, although I am sure if it did get messy and solictors got involved the terminology "not unreasonably withheld" would apply.

A couple of people have mentioned we don't need permission, and one has said we should re sketch the new footprint of the extension and just get a signature from the owners above on it otherwise they could get an injunction on any works we start.

Anyone got any ideas/been through this before?

Many thanks

Jock.

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Author: Precinct13 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55390 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 10:04
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Does your lease not say anything about 'Freeholders consent' required for alterations?

That would be the usual clause that I'd expect. As share of freehold, I'd then expect you to require a consensus approval amongst your neighbours (neighbour, in your case)

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Author: JocktheScot Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55392 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 10:54
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Thanks Precinct13,

Surely the consenscus approval is given though as i am in effect the freeholder?!
Perhaps this is the part I am failing to understand.

Jock

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Author: Precinct13 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55394 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 12:55
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You said that your flat is 'share of freehold'. So to my mind that would mean you would need your one other neighbour to consent to 'freeholders consent'...

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Author: Precinct13 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55395 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 12:57
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p.s. The Articles of Association of your Freehold company will spell out what vote is required to carry a resolution. (Something like 75% from memory).

It might be simpler just to have a rough 'proposed' floorplan and get your neighbour to sign it as 'approved' by them.

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Author: JocktheScot Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55398 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 14:05
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That's what the builder recommended so I'll probably do that.

Do you have any idea what happens if the other freeholder refuses to sign?

Jock

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Author: JonEBehr Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55400 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 14:22
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Do you have any idea what happens if the other freeholder refuses to sign?

Nothing! Nothing can happen - no building, no changes to access or fencing - nothing!

Not, at least, until you've examined your lease to discover what it has to say and then examined the documents of the Ltd Co in which you own a share and which owns the freehold (I'm assuming that it's held in this manner).

Your neighbour and co-owner of the freehold (or freeholding company) didn't object to your planning application so why do you anticipate problems now?

You did complete the certificate on the planning application which stated that you weren't the owner of the land but that you'd notified the owner of the application, didn't you? Surely you didn't commit the crime of certifying that you owned all the land that was the subject of the application!

If you had committed that crime and I were the upstairs neighbour who had not previously known about your application then I'd make it bloody difficult for you to get your own way. Bear in mind that you don't own the land on which you hope to build - it belongs to the freeholder.

Remember, by the way, that if the freehold is held by a company of which you're a shareholder (the usual structure) then, strictly speaking, you're not seeking the agreement of the neighbour but the consent of that company which must be properly given and documented if you ever want to sell/mortgage/whatever your flat.

Cheers!




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Author: Precinct13 Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55407 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 19:39
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That's what the builder recommended so I'll probably do that.

Do you have any idea what happens if the other freeholder refuses to sign?

Jock



You need to get your neighbours on board with your plan now; go on a 'charm offensive' if you like.

Firstly, as JonEBehr describes, you need their permission to do the works. But also, while the works are ongoing it will no doubt inconvenience them, and much better that you're clear and upfront and have their support before you start.

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Author: Clitheroekid Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55410 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 20:37
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You don't say whether the property's in England or Scotland. Scottish land law is totally different to English land law, and the advice so far seems to assume the property's in England.

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Author: JonEBehr Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55412 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 20:56
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You don't say whether the property's in England or Scotland. Scottish land law is totally different to English land law, and the advice so far seems to assume the property's in England.

Bugger! There's even a hint of a clue in the OP's name (and another subtle inference to be made from OP's profile).

I'm having a bad month (again). Have a rec.

Cheers!

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Author: BarrenFluffit Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55413 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 22:17
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"Bugger! There's even a hint of a clue in the OP's name"

Well yes but they don'thave leasehold in Scotland; its called something else.

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Author: JocktheScot Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55414 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 16/07/2007 22:37
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Despite my name this is actually in England - well pointed out though!

Just to paint a bigger picture (I think the view is that I have gone gung ho with this and am trying to pull the wool over neighbours eyes!) I have chatted to the neighbours on each side and our neighbour above about this, showed them plans (before we submitted them to the council) and generally discussed it.

After looking at the lease, it does state that the landlord must be asked if any structural alternations are to be made and that it must not be unreasonably withheld.

The Neighbour upstairs can be a bit 'funny' so I just want to make sure I know where I stand in different scenarios. Assuming I ask him to sign a copy of the new footprint, and he does, all is well.

If he doesn't sign it, it would surely be "unreasonably witheld" - so I am trying to work out what action I could take if that particular scenario arose. I can then weigh up the odds by deciding whether to actually ask him (before anyone jumps down my throat - I am 99.9% sure I'll ask!)

Many thanks again

Jock



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Author: Clitheroekid Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55415 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 17/07/2007 00:34
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Well yes but they don't have leasehold in Scotland; its called something else.

They do have leases in Scotland - http://news.bbc.co.uk/1/hi/scotland/edinburgh_and_east/6074792.stm

Going back to the main question it's not clear whether Jock owns the freehold jointly as an individual with the other tenant or through a company. However, from his description I suspect it may be as an individual.

This does happen from time to time and can cause problems.

As the lease apparently requires Jock to obtain the consent of the freeholder he must apply formally to his neighbour for such consent, and obtain it in writing.

If he fails to do so and simply starts construction he is at risk of the neighbour seeking an injunction stopping him from doing the work. Even if the neighbourt takes no action the flat would be rendered effectively unsaleable, as no normal buyer would want to buy into a potential conflict.

Hopefully, the neighbour will give approval, in which case there's no problem.

If he refuses to do so there's a big problem. The question then to be asked is on what grounds the consent is refused. If the neighbour refuses to give a reason Jock is home and dry, as that in itself is unreasonable. However, if, for example, the extension would reduce the light available to the neighbour or impinge on their privacy it may not be unreasonable.

The principles that the court adopts when considering whether a landlord can reasonably refuse consent were set out in Iqbal v. Thakrar [2004] EWCA Civ. 592. This obviously related to commercial property but the principles are similar, and were summarised as follows:

"(1) The purpose of the [covenant] is to protect the landlord from the tenant effecting alterations and additions which damage the property interests of the landlord.
(2) A landlord is not entitled to refuse consent on grounds which have nothing to do with his property interests.
(3) It is for the tenant to show that the landlord has unreasonably withheld his consent to the proposals which the tenant has put forward. Implicit in that is the necessity for the tenant to make sufficiently clear what his proposals are, so that the landlord knows whether he should refuse or give consent to the alterations or additions.
(4) It is not necessary for the landlord to prove that the conclusions which led him to refuse consent were justified, if they were conclusions which might be reached by a reasonable landlord in the particular circumstances.
(5) It may be reasonable for the landlord to refuse consent to an alteration or addition to be made, for the purpose of converting the premises to a proposed use even if not forbidden by the lease. But whether such refusal is reasonable or unreasonable depends on all the circumstances. For example, it may be unreasonable if the proposed use was a permitted use and the intention of the tenant in acquiring the premises to use them for that purpose was known to the freeholder when the freeholder acquired the freehold.
(6) While a landlord need usually only consider his own interests, there may be cases where it would be disproportionate for a landlord to refuse consent having regard to the effects on himself and on the tenant respectively.
(7) Consent cannot be refused on grounds of pecuniary loss alone. The proper course for the landlord to adopt in such circumstances is to ask for a compensatory payment.
(8) In each case it is a question of fact depending on all the circumstances whether the landlord, having regard to the actual reasons which impelled him to refuse consent, acted unreasonably."


If consent is refused then irrespective of whether it's reasonable or not probably the best solution from a practical point of view is to offer the neighbour some cash as `compensation' for whatever it is they're complaining about.

If that doesn't work then it might be possible to deal with the problem by appointing a mediator. If all else fails the only safe way forward would be to apply to the Court for a declaration that the neighbour was acting unreasonably in withholding consent. Hopefully, the threat of such action might be enough to get the consent, though it's unlikely to make for good future relations.

As always when dealing with immediate neighbours it's crucial to discuss things with them and keep them fully informed. If they think you're trying to pull a fast one any hope of getting what you want flies out of the window.

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Author: JocktheScot Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55418 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 17/07/2007 12:07
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Clithroekid,

Great post - have a rec!
Exactly the type of response I was looking for covering all sort of 'what if' questions.

I've drawn up a new floorplan 'sketch' of our proposed extension and will have a chat with the neighbours upstairs. They are planning to do a loft conversion at some point in the future so I am sure I will have no problem getting a signature on my sketch as I will no doubt have to do the same to them in the coming months/year.

The key question for me was any expansion of what could be termed as "consent reasonably witheld". The only problem this could potentially cause our upstairs neighbour is that it will obviously reduce his view of our garden (as we are building 4 metres into it). Other than that, there will be no rights of light issues as he is above us.

To anyone who is thinking of going through this, I would highly recommend having an informatl chat with all neighbours once you have had plans drawn up but BEFORE you submit them to the council. It has helped us hugely by maintaining an open dialogue. I served both party wall notices (by hand) on Sunday and got the first one back last night!

All the best

Jock

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Author: JonEBehr Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55445 of 69811
Subject: Re: Share of Freehold - Permission for Extension Date: 19/07/2007 16:46
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I am sure I will have no problem getting a signature on my sketch

You still haven't said how the freehold is actually held.

If it's held by a company then you and the neighbour (as the Officers of the Company which I assume you to be) should formally document the Company's consent so that in any future mortgage or sale of a leasehold the works can be demonstrated to have been given freeholder's consent. A simple signature on a sketch doesn't strike me as conclusive evidence - especially if the upstairs neighbour sells first and you might, in a year or two, have to persuade a potential buyer and/or lender that a signature (in his own right) of a potentially untraceable individual on a sketch satisifies the requirements of the lease.

The key question for me was any expansion of what could be termed as "consent reasonably witheld". The only problem this could potentially cause our upstairs neighbour is that it will obviously reduce his view of our garden

I know you were speaking colloquially but remember that it isn't really yours. The land belongs to the freeholder and you lease it for a limited period of time. This distinction may appear to you to be mere pedantry but it does make a big difference and you should get it right now rather than hope to correct the situation if/when it bites your bum.

Establish exactly from whom you as leaseholder need to gain consent. Recognising that there can be different legal entities involved and that individuals can wear many hats is important. This is not just for limited areas of the Law as, for example, a false claim on the planning application such as I previously mentioned is a criminal offence! (Though in practice it'll prove impossible to have the Police start a prosecution and a private prosecution will be too expensive to be worth it.)

By the way, before dismissing any matters that may impact your upstairs neighbour, bear in mind that it could have an effect on him that he and/or the freeholder or freeholding Company might consider. At the moment it may be the case that the Service Charge account is apportioned between the flats in a certain way per the leases. It sounds as if the extension will require a higher level of Buildings Insurance and therefore a higher premium. Should the current apportionment be reviewed? How about the external decoration and window maintenance - what does the lease say about this? Are there any other matters concerning common parts that merit review? Are the new areas of roof definitely your sole responsibility or can the existing leases be read as including all roof areas in the common parts?


Cheers!

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