Leasehold
Apr 26, 2024

Freeholder's Consent: What You Pay

In the bustling real estate market of London, where property prices consistently rank among the highest globally...

In the bustling real estate market of London, where property prices consistently rank among the highest globally, homeowners often face tough decisions regarding property expansion. With Stamp Duty adding significant costs to home purchases, many opt for property extensions rather than relocation. This article focuses on leaseholders considering alterations to their properties and the potential costs associated with obtaining freeholder's consent.

Alteration Costs

Common alteration projects include loft and rear extensions, with basement extensions being less frequent. While loft ownership has garnered increasing public awareness, the costs and complexities of obtaining freeholder's consent for internal alterations or rear extensions are often overlooked until the process is well underway.

The starting point for understanding your rights and obligations lies in the lease agreement. The wording of the lease dictates what alterations require consent and any associated costs. While a surveyor can offer initial guidance, consulting a solicitor may be necessary for absolute clarity. Our Chartered Surveyors handle such queries regularly, providing invaluable insight into navigating alteration clauses within leases.

Rear Extensions: Misconceptions and Realities

A common misconception arises regarding rear extensions. While leaseholders may own their garden and the space within their property's walls, external alterations typically involve the freeholder's property. As a result, freeholders can withhold consent or charge fees for alterations to the external fabric of the building. Calculating these fees often involves "development valuations" or residual valuations for technically minded individuals.

Internal Alterations

Internal alterations, such as converting a large one-bedroom flat into a two-bedroom space, can significantly increase property value. However, if freeholder's consent is required, leaseholders may need to share a portion of the hypothetical profit. Understanding the alteration clause in the lease is crucial, as it determines the extent of potential costs.

Consent Process

Regardless of whether a premium is payable, obtaining a license to alter from the freeholder is essential. This protects the freeholder's interests and ensures compliance with leasehold regulations. Engaging professionals such as architects, engineers, surveyors, and solicitors early in the project ensures a smoother process and minimizes potential setbacks.

Planning for Freehold Success

In conclusion, leaseholders considering property alterations must be aware of potential costs associated with obtaining freeholder's consent. Understanding the lease agreement and consulting legal and surveying professionals early in the process is key to avoiding surprises and navigating the consent process effectively. By planning meticulously and engaging the right professionals, homeowners can embark on property alteration projects with confidence and clarity.