Freeholder's permission for leaseholder to make a loft conversion

[daknin21]

Hi all,

My wife and I are freeholders of a 2-floor maisonette in London. We live on the ground floor and the neighbours on the first floor are leaseholders.

The leaseholders have notified us that they want to make a loft conversion but need our permission first.

Their lease states that they cannot "make any structural alterations in the upper maisonette without the approval in writing of the landlord to the plans and specification thereof such approval not to be unreasonably withheld."

1) What does "unreasonable" mean in this context? What sort of reasons can be invoked by us (the freeholders) to not give approval?

Their lease also states that "the landlord demises unto the tenant (...) the roof of the property and the rafters and beams supporting the same and the gutters and drain pipes thereof together with the chimney stacks of the property."

2) It isn't clear to me in the above whether the leaseholders own the loft space under the roof (although they own the roof) and also whether they own the air space above the roof (in case they need to go through the roof to make the alterations). Please can anyone clarify that to me?

3) My wife and I are tenants in common with my wife owning 67% of the shares and me 33%. Does this mean that my wife has the last word on the decision making, or is my permission sufficient for the leaseholders to go on with the alterations?

Thank you very much,
David

 

[Numpty]

As you have identified they do not own the airspace above the roof and your consent is required and you are not obliged to give it, and has to be negotiated. If the roof void is to be converted with just velux windows then you cannot unreasonably withhold consent they must pay your surveyors fees and your solicitors fees in drafting the licence and your reasonable admin fee for organizing it ( possibly £750)
If a dormer is required that is different and you can withhold consent if you were so minded

Consent will have to come from both you and your wife

My approach would be to establish what the profit ( increase in value less build costs) would be from their development of the roof void and seek around 1/3 of that profit . I would also make the upstairs lessee responsible in the say 15 year period following the development for any repair to the new structure. Subject to a minimum of £7,500

 

[daknin21]

As you have identified they do not own the airspace above the roof and your consent is required and you are not obliged to give it, and has to be negotiated. If the roof void is to be converted with just velux windows then you cannot unreasonably withhold consent they must pay your surveyors fees and your solicitors fees in drafting the licence and your reasonable admin fee for organizing it ( possibly £750)
If a dormer is required that is different and you can withhold consent if you were so minded

Consent will have to come from both you and your wife

My approach would be to establish what the profit ( increase in value less build costs) would be from their development of the roof void and seek around 1/3 of that profit . I would also make the upstairs lessee responsible in the say 15 year period following the development for any repair to the new structure. Subject to a minimum of £7,500

Thank you for your reply, that's very helpful.

Regarding seeking around 1/3 of the leaseholder profit, is that number based on any legal provision? What I mean is, if the leaseholders challenged this, on what grounds would I be able to justify this?

 

[Numpty]

The use of a third share perhaps illustrates expectations in a negotiation of this kind, and seems to accord with common sense, which requires the proposed share of profit not to be so high as to put the developer off the relevant part of the development. It must be remembered that if a developer agrees to pay one-third of an expected development profit regardless of whether or not it is actually made, it will be taking a risk and the other party will not be. This helps to explain the reasonableness of the one-third; two-thirds split rather than say a 50:50 or 40:60 split in a commercial context. The one-third approach can also be derived by analogy from the approach of the Lands Tribunal in the compulsory purchase decision in Stokes v. Cambridge Corporation

 

[daknin21]

Following my questions above, we have been engaging with the leaseholders who said that they have already got a property solicitor who has gone through all their leasehold contracts and is happy to create the necessary paperwork for us to sign, so they will pay for this.

My first question is, is it worth us talking to another solicitor on our side just to make sure that their plans and all the documentation is in order? And on the basis that they have already found a solicitor and are paying for this, would it be reasonable or not to ask them to pay for our solicitor too?

The leaseholders have also said that they will pay for any necessary surveyor fees. Again is it worth us hiring a surveyor separately just to ensure that their conclusions are consistent with those from the leaseholders' surveyor?

Thank you

 

[jordypreliminary]

Thank you so much for sharing your problem here; it's nice that I'm not alone in such a situation. Householders want our approval to renovate the second floor, where I live, so they have to get my agreement first. My wife also got a 40% of the papers to this apartment, so she's the second person they will approach with this question. We aren't against this, but I wouldn't say I like the company they chose to make all the work. I want to work with a company that does Loft conversions London, because I saw their projects and liked them immediately. Householders want the other company to make the renovation, so it's a big problem for us to get an agreement.