If you are thinking about adding value by expanding your flat into the loft space above then you will need to be careful that you obtain all the legal rights and consents you need from the freeholder (even if you have a share of freehold) before embarking on the expensive process of conversion.
Even forums purporting to provide legal advice sometimes appear to miss the pitfalls.
1. You do not own the loft.
Most leases do not include the loft space in the “demise” of the lease. This means you do not own it or have any rights to use it. This is often the fundamental problem.
Even if you use the loft space for storage you may or may not have a right to do so under the lease terms and in any event a right to use for storage does not lead you to ownership of this area even though you may be the only owner who physically has access to the space.
A landlord will normally be aware of the potential value of the loft space. There is no way of forcing him to sell. Sometimes it is worth considering purchasing the freehold with other tenants to obtain this space rather than negotiate terms with a difficult landlord.
2. You do not own the airspace around the roof space
Even if you own the loft space you may not own the area outside the structure of the building. This may be okay if you only require velux style windows for the conversion but if you want to build out e.g. by installing dormer windows or a balcony structure you will need to own this space also. Sometime this is implied by the lease terms but very much will turn on the exact wording.
The usual presumptions on this area are as follows:
- there is a legal presumption that the owner of land owns not only the surface of the land but also the airspace above and the subsoil below it. However this presumption applies more readily to freehold than to leasehold. This means your landlord’s freehold interest will included the subsoil and the airspace above meaning the landlord does have the ability to demise the subsoil and airspace to the tenants in the building;
- When considering the lease terms it is helpful to consider whether the drafting refers to horizontal or vertical divisions of the land. Where a property is demised vertically (for example a garage in a block of garages) it is more likely that the demise will be seen to be vertical and include the airspace and subsoil;
- However where the drafting refers to horizontal splits (for example, that the demise comprises the first and second floors of a building) there is a line of cases indicating that where the demise includes the roof, it is also likely to include some of the airspace above. However, those cases do not amount to a presumption that a tenant to whom a roof has been let always gets a demise of the airspace above it, particularly where there are multiple flats in the building. Therefore in a maisonette style lease which ownership and repair obligations are split through the line of the floor between the two flats then the implication will be stronger that the upper flat owns the airspace above the roof (although it does not follow that the lower flat includes the sub-soil beneath – see basement-developments-leasehold-flats-legal-pitfalls )
Many leases or deeds which purport to include the loft or roof space miss this point.
The problems is also one of certainty. On resale or remortgage a buyer or lender will not rely on case law to determine if you are correct unless the lease is very clear.
3. You do not have Landlord’s consent for the required structural changes.
Most leases will restrict changes to the flat. Often minor non structural changes are permitted with the landlord’s consent such consent not to be unreasonable withheld however structural changes (which would be required for a loft conversion) may be prohibited or only permitted with the landlord’s consent. The landlord may not have to be reasonable in deciding whether or not to grant that consent.
Sometime changes to pipes and wires running though the building will also require consent.
The landlord will have legitimate concerns that any changes to the building will not have an adverse effect on the remainder of the building although any such changes are likely to require building regulations approval and the council will oversee the works.
4. You may be interfering with other rights in the building
There may be services or other communal systems e.g. water tanks in the loft space. These may need to be relocated interfereing with the rights of other tenants.
You may want to erect scaffolding to enable the work to be carried out – specific rights should be provided for to enable you to carry out the work.
5. You will need to consider the repair obligations for the building in particular concerning the roof
The roof may be maintained at a communal cost. If you make changes to it the cost of repairing may increase because the roof structure is more expensive to repair. This is sometimes offset by the fact that the upper flat owner is completly replacing or refurbishing the roof and not passing on any of the cost to the other tenants/freeholder. Often we see situations where the tenant is offered the loft space for conversion where they take on this repair responsibility forever more. Each matter can turn on its own circumstances.
In addition you are changing the floor area of the flat – sometimes doubling it – you would need to consider whether the existing division of the service charge/insurance is correct, for example, in a building with two flats will the old 50:50 split turn into 1/3 : 2/3.
6. You assume that a share of freehold equates to consent – it does not.
Even where you own a share of the freehold the other co-owners are not bound to consent to such an arrangement. You still have to deal with the lease and obtain the necessary consents from your co-owners. Some times this can be trickier than dealing with a third party landlord (who can usually be motivated by a monetary payment). For your neighbour this may be a personal disruption to their privacy which may not be easy to compensate in monetary terms especially if the property is wrapped in scaffolding. Even if the lower flat(s) are let there may be issues with tenants and potential loss of rent. You may need to agree strict timetables and sweeten the deal with offers to carry out redecoration to common or external parts.
7. You assume that you can turn the loft space into another flat.
Most leases are specific above sub-division – there is usually an express prohibition on sub letting part or assigning part of the lease. Often there is a covenant to keep the flat as a single dwelling. This means that you will need to deal with the landlord to vary your lease (for which he does not need to be reasonable). If you carry out the sub-division without consent he may forfeit your lease.
If you are considering such work it is important you obtain correct advice on the terms of your lease and the agreements you need to seek to achieve your goal. We provide initial opinions on your lease terms from £350 plus VAT and lease variations and licences for alterations from £650 plus VAT. For further details contact Mark Sadler on 01708 757575 or email firstname.lastname@example.org for further assistance.