Improving a flat, either to boost its resale value or to create your own dream home, is on many homeowner’s wish list. However, the bigger the alteration, the more there is to consider.

Remember that the freeholder has a vested interest in the building and so has some say on what you can and cannot do. So, yes, you may need a licence to alter the kitchen or bathroom in a flat.

Obtaining a Licence to Alter

You might want to install a new kitchen or bathroom, or remodel a bedroom or a larger open-plan area. All of these are likely to require the freeholder’s consent, including a Licence to Alter. This is a formal consent document that is designed to protect the freeholder’s interest in a leasehold flat, but protects leaseholders too by ensuring that the right questions are asked and answered before work begins. The leaseholder applying for the licence has to pay for the legal and survey costs incurred by the freeholder.

Sometimes the lease will tell you what works need to be referred to the freeholder. If you go ahead without consent, you may be forced to pay for reinstatement or a retrospective Licence to Alter.

Structural alterations that could compromise the integrity of the whole building or alter the layout and fixtures of a flat could need to be approved by a surveyor and engineer.

Internal decorative work may rarely need consent, but you may want to check your lease agreement.

Typically, a lease can contain up to three provisions for different types of alterations. You need to check which category any proposals for home improvement fall into under your particular lease:

  • Absolute Covenant: prohibits the alteration absolutely.
  • Qualified Covenant: prohibits alterations without the freeholder’s consent.
  • Fully Qualified Covenant: provides that the alteration may only take place with the freeholder’s consent which, the clause specifies, must not be unreasonably withheld.

How to obtain consent

Start early. Get it right and you could avoid lengthy disputes down the line.

As a leaseholder, if you decide that you want to carry out alterations, you could send the freeholder or agent a brief description of the proposed changes and get the ball rolling.

If they then confirm that formal consent is needed, you can begin the preparation to submit designs and specifications. The freeholder’s surveyor and, if necessary, a structural engineer, can check the information provided and may personally visit the property.

Typically, the consent will then be drawn up by the freeholder’s solicitor, who will liaise with a surveyor. A surveyor may also be needed to monitor the work and check that other flats and common areas, before and after, to confirm they have not incurred any damage.

All these professional costs may be charged to the tenant leaseholder wanting to do the work, and they might still find that consent is withheld.

Administration fees

Freeholders or managing agents my charge an administration fee for processing a Licence to Alter. The invoice for this must be served with a summary of freeholder’s rights (under the lease) to make administration charges. It’s best to discuss any likely charges at an early stage in the process to avoid any surprises.

You can find more helpful advice in the Understanding your Lease section of the Leasehold Advisory Service website.

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The sole purpose of this article is to provide guidance on the issues covered. This article is not intended to give legal advice, and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and/or market practice in this area. We make no claims as to the completeness or accuracy of the information contained herein or in the links which were live at the date of publication. You should not act upon (or should refrain from acting upon) information in this publication without first seeking specific legal and/or specialist advice. Arthur J. Gallagher Insurance Brokers Limited accepts no liability for any inaccuracy, omission or mistake in this publication, nor will we be responsible for any loss which may be suffered as a result of any person relying on the information contained herein.