Leasehold questions

[Jeffrey Shaw 90]

If I, the leaseholder, want to have an extension added to our house (on land covered by the lease), I understand that the plans would have to be submitted to the freehold reversioner who is(?) entitled to charge for his permission to carry out the work. Can he charge what he wants? Is there any recourse if I believed the charge was unreasonable? this has not happened to me yet; I would just like to be prepared whilst I have the opportunity!

 

Yes, the freeholder can charge what they please. I have no idea if there is any form of appeal against this as we just purchased the freehold instead

As before, that's not quite right. Why? Because s.19(2) of the Landlord and Tenant Act 1927 [yes, really] says this:

 

In all leases whether made before or after the commencement of this Act containing a covenant condition or agreement against the making of improvements without a licence or consent, such covenant condition or agreement shall be deemed, notwithstanding any express provision to the contrary, to be subject to a proviso that such licence or consent is not to be unreasonably withheld; but this proviso does not preclude the right to require as a condition of such licence or consent the payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or any neighbouring premises belonging to the landlord, and of any legal or other expenses properly incurred in connection with such licence or consent nor, in the case of an improvement which does not add to the letting value of the holding, does it preclude the right to require as a condition of such licence or consent, where such a requirement would be reasonable, an undertaking on the part of the tenant to reinstate the premises in the condition in which they were before the improvement was executed.

 

So the leaseholder (T) can make improvements without having to pay a large sum to the freehold reversioner (L).

 

I agree that an extension within the leasehold extent may need consent (= only if the lease says that it does). What is the precise wording of the lease clause that states the need for L's consent? Does it say "...not to be unreasonably withheld or delayed"?

Edited September 20, 2011 by Jeffrey Shaw

[Strix 11]

As before, that's not quite right. Why? Because s.19(2) of the Landlord and Tenant Act 1927 [yes, really] says this:

 

In all leases whether made before or after the commencement of this Act containing a covenant condition or agreement against the making of improvements without a licence or consent, such covenant condition or agreement shall be deemed, notwithstanding any express provision to the contrary, to be subject to a proviso that such licence or consent is not to be unreasonably withheld; but this proviso does not preclude the right to require as a condition of such licence or consent the payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or any neighbouring premises belonging to the landlord, and of any legal or other expenses properly incurred in connection with such licence or consent nor, in the case of an improvement which does not add to the letting value of the holding, does it preclude the right to require as a condition of such licence or consent, where such a requirement would be reasonable, an undertaking on the part of the tenant to reinstate the premises in the condition in which they were before the improvement was executed.

 

So the leaseholder (T) can make improvements without having to pay a large sum to the freehold reversioner (L).

 

I agree that an extension within the leasehold extent may need consent (= only if the lease says that it does). What is the precise wording of the lease clause that states the need for L's consent? Does it say "...not to be unreasonably withheld or delayed"?

Your quote is as vague as my statement but thanks for the clarification

[Jeffrey Shaw 90]

Your quote is as vague as my statement

No. The difference is that my quote shows the precise statutory wording: hard going, true, but not 'vague' at all!

[Strix 11]

it's still open to interpretation. 'payment of a reasonable sum' still doesn't determine numbers or a formula for calculating a definite amount

[Jeffrey Shaw 90]

it's still open to interpretation. 'payment of a reasonable sum' still doesn't determine numbers or a formula for calculating a definite amount

True. It takes into account a wide array of possible circumstances, so it could never be fixed in advance.

[martyn800 10]

As before, that's not quite right. Why? Because s.19(2) of the Landlord and Tenant Act 1927 [yes, really] says this:

 

In all leases whether made before or after the commencement of this Act containing a covenant condition or agreement against the making of improvements without a licence or consent, such covenant condition or agreement shall be deemed, notwithstanding any express provision to the contrary, to be subject to a proviso that such licence or consent is not to be unreasonably withheld; but this proviso does not preclude the right to require as a condition of such licence or consent the payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or any neighbouring premises belonging to the landlord, and of any legal or other expenses properly incurred in connection with such licence or consent nor, in the case of an improvement which does not add to the letting value of the holding, does it preclude the right to require as a condition of such licence or consent, where such a requirement would be reasonable, an undertaking on the part of the tenant to reinstate the premises in the condition in which they were before the improvement was executed.

 

So the leaseholder (T) can make improvements without having to pay a large sum to the freehold reversioner (L).

 

I agree that an extension within the leasehold extent may need consent (= only if the lease says that it does). What is the precise wording of the lease clause that states the need for L's consent? Does it say "...not to be unreasonably withheld or delayed"?

Jeffrey. Regarding the wording of the lease, which I have now dug out....

I find this very hard reading. It also refers in the terms Lessee and Lessor. The lease states that plans and specifications have to be submitted to the Lessors for their consent for any additional buildings. I can't find anything about any obligations on the Lessors, nor anything regarding payment for consent. What would be a typical payment for consent for a small extension or porch under these circumstances?

 

On a more general note, the lease appears to grant the Lessor access to the property and also bans the building of further fences or garden walls.

 

Aren't many of the key terms of these leases completely absurd? Is it really sense to expect a house to be maintained 'as-is' other than agreed improvements for 800 years and then handed over to the freeholder FOC? I believe that this does not normally happen, and that freeholds are renegotiated, but what is the sense in stipulating this nonsense?

[Veritas 10]

I have a 999 year lease. The owners of the freehold reversion were Proctors. They offered me the freehold reversion a number of years ago at 20x annual Ground rent i.e 20 x £4 plus legals. (I presume they offered this to all their other leaseholders as well). I did not take the offer up and the freehold reversion was sold to Coppen Estates whom I now pay my £4 per year to. I have never received any communication from them other than the annual ground rent invoice, so cannot comment on their policy with regards to Insurance. I did however require their approval for my conservatory which involved sending them a cheque for £200 plan together with a plan of the proposed construction. So iif you are planning to extend it is probably worth looking at buying the freehold reversion.

 

A friend of mine had a conservatory built without the prior permission of the owner of the freehold reversion which became an issue when he wanted to sell his house. This was resolved by the payment of £1000 for retrospective permission

[crookesey 635]

True. It takes into account a wide array of possible circumstances, so it could never be fixed in advance.

 

You guys do have your Sir Humphrey Appleby moments, when my solicitor used to go off on one I used to close my eyes and pretend that I had dropped off, he eventually reverted to speaking English.

[martyn800 10]

I have a 999 year lease. The owners of the freehold reversion were Proctors. They offered me the freehold reversion a number of years ago at 20x annual Ground rent i.e 20 x £4 plus legals. (I presume they offered this to all their other leaseholders as well). I did not take the offer up and the freehold reversion was sold to Coppen Estates whom I now pay my £4 per year to. I have never received any communication from them other than the annual ground rent invoice, so cannot comment on their policy with regards to Insurance. I did however require their approval for my conservatory which involved sending them a cheque for £200 plan together with a plan of the proposed construction. So iif you are planning to extend it is probably worth looking at buying the freehold reversion.

 

A friend of mine had a conservatory built without the prior permission of the owner of the freehold reversion which became an issue when he wanted to sell his house. This was resolved by the payment of £1000 for retrospective permission

That is really good info - thanks Veritas. An investment in buying the freehold may have perhaps been good for you. This has done nothing for my opinion of freehold reversioners and the leasehold system though! So these companies appear to buy up freeholds on the expectation of taking exorbitant payments for just saying 'Yes' if somebody wants to make a home improvement. Or if somebody does not ask permission at the right time, they get completely shafted for a gross retrospective payment. Houses cannot stand up forever in their built state, so it just seems a system that allows freehold reversioners to make a significant income from doing nothing that is of any use.

[Jeffrey Shaw 90]

I find this very hard reading. It also refers in the terms Lessee and Lessor.

These just mean- respectively- the person by whom (and the person to whom) the new lease is granted.

 

 

The lease states that plans and specifications have to be submitted to the Lessors for their consent for any additional buildings. I can't find anything about any obligations on the Lessors, nor anything regarding payment for consent.

It's unlikely that the lessors have any major obligations, if it's a house.

But please post the 'consent' clause's full wording.

 

What would be a typical payment for consent for a small extension or porch under these circumstances?

The lease should state. Anything more than £100 is unreasonable, if it's a house.

 

On a more general note, the lease appears to grant the Lessor access to the property and also bans the building of further fences or garden walls.

 

Aren't many of the key terms of these leases completely absurd? Is it really sense to expect a house to be maintained 'as-is' other than agreed improvements for 800 years and then handed over to the freeholder FOC? I believe that this does not normally happen, and that freeholds are renegotiated, but what is the sense in stipulating this nonsense?

No. The covenants ensure that each house is maintained satisfactorily. You'd not want an unmaintained house next door!

[martyn800 10]

These just mean- respectively- the person by whom (and the person to whom) the new lease is granted.

 

 

 

It's unlikely that the lessors have any major obligations, if it's a house.

But please post the 'consent' clause's full wording.

 

 

The lease should state. Anything more than £100 is unreasonable, if it's a house.

 

 

No. The covenants ensure that each house is maintained satisfactorily. You'd not want an unmaintained house next door!

Up to £100 is reasonable - thank you - that is the information I was looking for.

 

Regarding the full wording of the consent clause of the lease - the lessor (me) signs up to several pages of what he can and can't do! I can't convey all that. The key section basically states that .......... "THE Lessee hereby covenants with the Lessors as follows :-

 

- Not to erect on the said plot of land any other buildings except outbuildings already erected or agreed to be erected without first submitting the plans and specifications thereof to the Lessors and obtaining their consent thereto nor without such consent to erect any fences or walls ........."

 

There is no mention or guidance about any fee for consent. Also no mention of "...not to be unreasonably withheld or delayed", to quote your earlier question.

[Jeffrey Shaw 90]

Note: the covenant is a 'one-off' type, i.e. to build without consent would be one breach, not a continuing breach.

 

The covenant is 'partly qualified', i.e. L [landlord, the freehold reversioner] does not have absolute discretion to allow (on whatever terms he/she demand) or refuse. Because the words 'obtaining their consent...' appear, s.19(2) of the 1927 Act [see post #25] operates so as to add-in the words 'not to be unreasonably withheld or delayed' as if they were already explicit.

 

The main argument will be whether the alterations are an 'improvement' [Act applies] or not [Act does not apply].

Edited October 2, 2011 by Jeffrey Shaw