Modular extension project

[Archer]

Hello all,

 

I'm a long term lurker of E-build (RIP) and this forum - both depositories of excellent, practical advice. The initial plan was to self-build at Gravenhill in Oxfordshire but life got in the way of that one so now it's time to explore a different option. 

 

We are embarking on a single storey kitchen extension to our London maisonette. We've recently had a planning application submitted and hope to work through some of the (many) practical challenges - on the list is freehold consent; party wall issues; fire suppression and drainage... It'll be a relatively small project but hopefully our experiences can inform other who are considering similar projects in the future. 

 

I'll try and post some blog details up shortly as we get going on selecting a SIPS / garden room contractor.  

[MikeSharp01]

Sounds like a great project and good to see you have come out from the shadows. Why do you need freehold consent? Presumably because you are a leaseholder,  and I guess you need to work out the betterment value with them as they will get that value on reversion of the lease. Interesting complication.

[jack]

Welcome Archer (sploosh!)

[Guest Alphonsox]

Welcome to the forum

[Ferdinand]

Welcome.

[Archer]

Thanks all (and good to see another Archer fan in the crowd as well!)

 

Adding an extension to a leasehold flat has added a whole world of complexity that we wouldn't have otherwise had...planning permission for one and also for example we are looking at having to appoint up to 3 party wall surveyors in the worst case - for our neighbours on each boundary (who have been really supportive to date) and our freeholder. That's partly why SIPS appeal to us - because it would be good to get the extension up quickly and minimise disruption. We are also exploring using either ground screws, quickbase or easy pad foundations for the same reason though its not clear whether this is really going to work for us yet. 

 

As you can see, my head is rolling with this stuff, so thank you in advance for your advice and patience!

 

Mike, exactly, we need freeholder consent because we are leaseholders. Usually there will be a clause in the lease stating that this should not be "unreasonably withheld". Unfortunately ours doesn't have this so the freeholder can charge what they wish - in our case, a £5k premium for consent, with the alternative being to pursue the freehold purchase... One to watch out for anyone purchasing "doer upper" properties where you flippantly start re-arranging the plans off Rightmove in your head.

[Ferdinand]

@Archer

 

On your last para, I think that "which may not be unreasonably withheld" may be imputed into your clause by general law where consent for alterations is concerned. And if they charge more than is "reasonable" then you have comeback.

 

I am more familiar with rental contracts, where there are many topics where that needs to be included for a clause to stand, but this is from the Government's Leasehold Advisory Service website:

 

"You should ensure that the lease allows you to carry out alterations to the property. There may be a pre-condition that you must obtain consent from your landlord or some other party before proceeding with any works. This means that you cannot carry out the works without first obtaining consent. Consent should not be unreasonably withheld if the alteration is an improvement. If your lease does not allow you to carry out alterations you will need to ask your landlord if they are willing to waive this restriction."

http://www.lease-advice.org/faq/i-want-to-alter-my-property-do-i-need-to-ask-my-landlord-for-permission/

 

On the 5k charge, that is an Administration Charge, and as such must be reasonable. That is, it must fro example relate to the amount of work they actually need to do. If they write one letter and lick one stamp, £5k is too much, but if they have to do umpteen reports and employ several ologists, then it might be more reasonable. You should be able to have a breakdown and query the amount if excessive.

 

"Any administration charge demanded by the landlord must be reasonable in order for the landlord to recover the charge, and must be accompanied by a summary of the leaseholder’s rights and obligations in respect of administration charges. If the summary is not included, the charge is not regarded as being payable unless, and until, the demand is made with the summary."

http://www.lease-advice.org/advice-guide/service-charges-and-other-issues/#23

 

I think the relevant legislation is the Landlord and Tenant Act 2005.

 

The Leasehold Advisory Service offer Free Advice by phone or email. https://clients.lease-advice.org/appointments.aspx, and I suggest you avail yourself of 15 minutes of their time ... just to help understand your context. As ever have a bullet-pointed half page summary and questions to hand, and a copy of your lease which you have already read, marked, learned, and inwardly digested.

 

Opinion not advice: To my eye 5k looks high unless they are having to spend about 2-3 weeks of man hours on it, and consult several professionals on top. My feel is that 1k is more reasonable, or 2k if it involves checking structural work etc. affecting other flats. That is my guestimate. They may also need specific insurance. Remember that they cannot set their PW costs against the 5k if you are paying for that separately - watch for that Fast One.

 

Ferdinand

 

 

Edited June 6, 2017 by Ferdinand

[Ferdinand]

For more questions there is a lot of expertise on the Landlordzone forum, especially on the Long Leasehold subforum here:

http://www.landlordzone.co.uk/forums/forumdisplay.php?11-Long-Leasehold-Questions

 

Especially in the FAQ at the top:

http://www.landlordzone.co.uk/forums/showthread.php?62429-FAQ-On-Leasehold-Property-Issues-Your-Answer-Might-Be-Here

 

And in thread 3 in the FAQ on Consent: <--- READ THIS PARTICULARLY.

http://www.landlordzone.co.uk/forums/showthread.php?62040-Consent-For-Alteration-Addition-and-Conversionscharges-SC-and-GR

 

Suggest you read all of that (and I mean the FAQ in detail, and skim the entire subforum as far as you can bear - see you next week :-) ), and your head will start spinning more slowly.

 

And I think it may be worth a check what happens if you extend your lease using your legal right or purchase freehold now or after your alterations. Will your project eg increase the prices of these operations.

Ferdinand

 

Edited June 6, 2017 by Ferdinand

[Archer]

Ferdinand, this is incredibly helpful advice - thank you for taking the time to lay it out in such detail. I've had a scan through the links and as you say the FAQ on consent is very relevant to our situation. 

 

By chance we spoke to the leasehold advisory service today. You have to book a 15 minute slot online and they book out fast so we had been waiting a couple of weeks for advice. Interestingly, they gave similar advice to you - essentially that consent could be deemed an implied clause, even if not explicitly stated in the lease. The key points seem to be whether the external walls and gardens are included in the lease demise and also the general wording of the lease. Interpreting leases is obviously a very technical area and ours seems ambiguous even after a read through of all the relevant guidance. Luckily the leasehold advisory service will also review written documents and provide free advice in writing so we have duly sent our lease and plans off to them for a second opinion. The only drawback is a further 2 week delay - but obviously worth it if we can avoid or reduce a £5k premium. 

 

The next difficulty seems to be enforcing our rights, even if they do exist. Freeholders are in a strong position here, because building a case that consent is being unreasonably with-held will be almost as expensive as proceeding with the freehold purchase, once surveyor valuation and solicitors fees are taken into account. It's definitely a minefield, and one we could have done without, all else told. Our predicted cost for adding 12 m2 of space, a new kitchen and general refurbishment is now up around £70k... it's absolutely horrendous really. When I have a moment, I'll post in the extensions section as a cautionary tale for others. 

 

Anyway, I'm sure this is fascinating for everyone else on the Buildhub - it certainly has been a unique learning adventure for me! Looking forward to getting into some of the more practical construction challenges. 

[Ferdinand]

Pleasure. You also get the experience as well as potentially saving some money, of course.

 

The thing I try to remember is that it is always a money vs risk vs time tradeoff. eg You can spend your time learngin something, but one of your judgements is when to spend your time to reduce your risk and save your money ... or when to pay a professional (then their is a relationship to manage with that pro ... and you need a smaller amount of knowledge / experience to manage that, but you need more if you save money by going to an inexperienced pro).

 

The same applies imo to architects .. most self-builders only build one house but others have built 5 or 10 ... and the inexperienced self-builder can easily take the 7-year-trained architect at their word and not know how to be an effective client. You need a segment of their expertise to be able to manage them - taking time to visit 28 houses helps, but so does having built a couple of projects using one. Personally even though I have never built my own house, I grew up around architects which helps a lot. 

 

It may not be about building a case (unless you go to formal process) but also having them be convinced that you are an experienced person as that will change their attitude. 

 

Then it is down to you making then backing your own judgement when you are satisfied. You will need to dance a jig around the interpretation of "reasonable" in your circs (any neighbours to ask?), and a potential saving of say 5k ->2k may not justify employing a solicitor more than minimally. Their expertise in setting the charge may be (what it costs to do it + a bit less than what it will cost you to challenge it). If you are agonising then they may have got it right  from that perspective.

 

This thread is an interesting one .. @hmpmarketing asked an excellent initial question, then drew on lots of perspectives to get a handle on it, but then sorted the potential issue with a neighbour's parking space over a half hour chat at the gate. Handled differently they could have been "on their dignity" for the next decade and not talking, or in a complaints war. It may be argued that he there was "too much information", but I am sure the extra hinterland (albeit it many opinions some of which clashed) helped.

 

Do not forget that you could post on the other forum mentioned. The poster Leasehold Answers used to run an advisory business iirc, but does not seem to be active now.

 

One more: do some online research on our Freeholder. There are companies that are professional investors who make a living from the fees - smoe are exploitative and some are OK, so it will help to know what you are potentially dealing with.

 

At least you get your 70k back on the house price in London. Probably.

 

Ferdinand

Edited June 8, 2017 by Ferdinand