Licence to Alter

The process will vary according to particular circumstances, and whether the building has an appointed managing agent. In most cases, where a building is managed well, the process of applying for, and obtaining Landlord’s consent comprises the following stages:

1. The Leaseholder provides a brief description of the proposed works to the Landlord or more often the building’s managing agent.
2. Unless in the case of very minor alterations, the managing agent refers the package to the Landlord’s surveyor.
3. If the surveyor deems formal consent is required, taking into account the proposals in the context of the lease (And any other regulations specific to the building), they will obtain an undertaking for fees.
4. The Leaseholder is then required to submit all technical information to the surveyor.
5. The surveyor visits the site and carries out a technical review of the proposals, liaising with the Leaseholder to obtain further information or clarifications.
6. At this stage, the surveyor may also recommend the appointment of other, specialist consultants, such as a Landlords checking structural engineer.
7. The surveyor then prepares a report and submits it to the Landlord. The report will contain a summary of the proposals, reference to the drawings and technical information, and an assessment of the implications of the building. The surveyors report will also contain the various recommended terms and conditions to be incorporated into the consent. If the Landlord is satisfied, they will instruct solicitors to draw up a formal document.
8. The Landlord’s solicitors then send the draft document to the surveyor, and if approved it is sent to the Leaseholder for his or her signature.
9. The surveyor will ensure that all ‘Pre-commencement” obligations, have been discharged by the Leaseholder prior to works commencing.
10. The surveyor carries out regular monitoring inspections if requited, and then a final inspection, which results in a completion report. The completion report will be issued only when all conditions have been discharged, such as obtainment of various completion certificates from the Leaseholder.
11. Finally, solicitors will discharge the licence and return any deposit monies if appropriate.

Under most leases, a Leaseholder is required to obtain consent from their Landlord before making any alterations to their property. The formal consent is usually referred to as a Licence to Alter or Licence for Alterations. The Licence to Alter is formal, written consent that sets out the Terms and Conditions under which the alteration can be carried out. It helps to ensure that no unexpected complications or conflicts will arise as a result of the work.

On one level, a Licence to Alter is a simple contract between a Leaseholder and his or her Landlord, but in fact it often involves multiple parties and stakeholders.Once the Leaseholder asks the Landlord for permission to carry out the alteration, the Landlord will typically call upon a surveyor and ask them to review the Leaseholder’s proposals, assess the proposals in the context of the lease and report on their implications for the building.

The surveyor will also provide recommendations for the Terms and Conditions of the consent (The Licence to Alter). Solicitors (either acting on behalf of the Landlord and/or the Leaseholder) often become involved to liaise between the Landlord and the Leaseholder and draw up the formal consent (Licence to Alter).

Moreover, other leaseholders in the same building may have to be consulted and their interests taken into consideration, along with planning law, building regulations and any management guidelines relevant to the particular property. In short, while simple in theory, Licences to Alter are often complicated in practice, and both Leaseholders and Landlords are well-advised to seek professional guidance.

The terms of many residential leases restrict Leaseholders from carrying out alterations before seeking Landlord’s consent (a Licence to Alter) to protect the interests of freeholders (Landlords) and other Leaseholders. The requirement prevents Leaseholders from making reckless alterations that could be dangerous or diminish the value of a building, which is an obvious concern for Landlords/Freeholders (and other stakeholders).

From a Leaseholder’s point of view, it is important to establish whether a Licence is required prior to commencement of the works as: you will almost certainly be in breach of lease terms and will expose yourself to the possibility of enforcement action being taken against you; you may experience difficulties in selling your property if you have made unregulated changes to the demise of your property and it may be difficult and more costly to seek to apply retrospectively for consent once the works have been finalised.

For obvious reasons there are precautions and procedures that need to be followed before a Licence should be granted.

A Licence to Alter also protects other Leaseholders. In the process of reviewing the proposals and advising on the terms and conditions for consent, the surveyor will take into account any risk of damage to neighbouring properties, either in the course of the work or as a result of it; if, for example, structural alterations are proposed, damage could occur not only if the new supports are not properly designed, but also as a result of vibration and/or if temporary supports are not properly considered.

The surveyor will also consider whether the alteration could have longer-term negative consequences, such as in the case of noise nuisance; for example, the installation of hard floor finishes can result in unacceptable noise nuisance in adjacent properties/flats.

So a Licence to Alter is far from just being a piece of paper. In reality, it is the end product of a careful process of diligent investigation and consultation. To be effective, that process must be holistic and professionally undertaken, so it is best carried out by experts who can oversee the whole process.

One of the first jobs for a surveyor called in to review a Leaseholder’s proposals is to ascertain whether they do indeed require a Licence to Alter.

Typically most leases will contain one of three provisions (or a combination of the three) in relation to alterations:

1. Absolute Covenant: prohibits the alteration absolutely. Only if the Landlord is prepared to waive the clause will the tenant be able to make alterations;
2. Qualified Covenant: prohibits alterations except with the Landlord’s consent;
3. Fully Qualified Covenant: the alteration may only take place with the Landlord’s consent, which must not be unreasonably withheld.

Minor home improvements such as internal redecoration can usually be carried out under the terms of the lease. Anything that more substantially affects the fabric of the building will often require a Licence to Alter, and the surveyor will therefore undertake a more thorough review of such proposals with a view to drawing one up.

Some common examples of alterations include structural alterations, hard floor finishes, relocation of wet areas and external alterations.

Structural Alterations

These include changes to room sizes to create larger spaces, or the re-positioning of door openings. In such cases, it is usually recommended that the Landlord appoints an independent checking engineer to check the design and calculations of the Leaseholder’s engineer and ensure they have not made any errors or inappropriate assumptions. Schedules of condition must be prepared of the flats above and below the works, both before and after the structural alterations, to record whether any damage has occurred. The engineer must also consider whether load paths will be affected and if the contractor’s temporary works have been assessed and approved by the engineers.

Installation of hard floor finishes

Many leases state that floors in flats are to be left carpeted. A Leaseholder who removes carpet to install a hard floor finish (such as wood or stone) will often be in breach of their lease due to the noise nuisance that can result, affecting other flats. Where the Landlord will consider granting consent for the use of hard floors, it is important that the potential for noise nuisance resulting from the new hard flooring is mitigated. For this reason, specialist acoustic tests should be carried out to test the performance of the existing carpet, and acoustic insulation material suggested to meet the relevant benchmarks. Post-installation tests are also recommended to provide assurances that the new flooring and insulation meets the design targets.

Relocation of Wet Areas

Moving of kitchens and bathrooms to other parts of a property (or installing en-suites) can create noise pollution and affect plumbing elsewhere in the building. The Licence to Alter for such proposals must consider ventilation, installation of macerators, waterproofing systems and specific conditions that set a precedent throughout the building if one is not already in place.

External Alterations

Replacing windows, pipe-work alterations and the installation of new louvers all involve cutting into the Landlord’s structure (the external walls). In drawing up a Licence to Alter, a surveyor will therefore specify the appearance and durability of the materials to be used and ensure that the work will be carried out safely, taking into account any planning considerations and any precedents that might be set.

In each case, and in countless others, all parties will benefit from professional expert help.

Earl Kendrick have vast experience in dealing with residential Licences to Alter and our skills and expertise in this area enable us provide clear advice to both Leaseholders and Landlords.

We are regularly appointed to act as the Landlord’s surveyor to monitor Leaseholder works and often for large and complex Leaseholder alterations projects.

Our services include drafting management guidelines and regulations on behalf of the Landlord, reviewing and advising on the Leaseholder’s proposals, monitoring of the works on site and ensuring that all completion documentation is handed over before sign off.

Members of our Licence for Alterations team regularly contribute to professional publications and speak at conferences and host industry webinars on the topics of Licence for Alterations.