A Licence to Alter or Licence for Alterations is a formal legal document which provides a leaseholder of a residential flat with permission from their freeholder to make alterations to their property.
The solicitors working on behalf of the freeholder and leaseholder usually agree the form of the Licence to Alter between them. Often it includes input from other professionals such as detailed plans or architectural drawings of the alterations.
Your lease will usually set out the types of building work that you need a Licence to Alter for.
This article explains:
- When do I need a Licence for Alterations?
- When do I need a Retrospective Licence to Alter?
- What types of building work need a Licence to Alter?
- What does a Licence to Alter do?
- When can my freeholder say “No” to my proposed alterations?
- When can my freeholder charge for the Licence to Alter?
- How much does a Licence to Alter cost?
- What are the steps for getting a Licence to Alter?
- How long does it take to get a Licence for Alterations?
- What happens if I fail to get a licence for my alterations?
It summarises in providing guidance in choosing a solicitor to act on your behalf for a Licence to Alter
Why do I need a Licence for Alterations?
Your flat is probably your biggest asset, and it is imperative that if you protect it by securing and documenting permission for any changes.
If your lease requires you to seek permission from your freeholder and you fail to do so, you will be in breach of your lease.
This is likely to cause you significant issues when you:
- Come to sell your property – because your buyer’s solicitor will refuse to complete the sale until a Retrospective Licence to Alter is in place
- Decide to extend your lease – because as part of the lease extension process your freeholder’s valuer will identify that you’ve completed unauthorised alterations
- At any other point in the future when your freeholder identifies the changes have been made without permission.
While the paperwork associated with applying for a Licence to Alter is definitely less fun than knocking down a wall, failing to get permission in place could be a very costly mistake.
When do I need a Retrospective Licence to Alter?
You are likely to find that you need a Retrospective Licence to Alter if you’ve made any alterations without getting sufficient permission.
Often a Retrospective Licence to Alter is required if you want to sell a property, because the buyer’s solicitor will advise their client against going through with the sale of the property without sorting this out first.
Equally, we often find that during the lease extension process a freeholder’s valuer will realise that the property has been altered without consent – and require this issue to be rectified as part of the process.
Finally, if there is another reason that your freeholder is “tipped off” to the fact that your flat has been altered without consent, they might well want a Retrospective Licence for Alterations to be in place.
What types of building work need a Licence to Alter?
Leases are frustratingly inconsistent about when you need a Licence for Alterations and when you don’t. In the first instance, you should review your own lease, but unless it is crystal clear you may need to seek the advice of a solicitor to ascertain if permission is required:
- Adding, removing, or moving walls
- Changing door openings
- Adding rooms such as an ensuite
- Extending a ground floor property into the garden
- Converting your roof space into a habital space
- Renewing your flooring, particularly if this involves installing hard floor where carpet was previously used – because this can increase impact noise
- Other changes to the external appearance of the building – even sometimes trivial items like windows or satellite dishes
Sometimes simply leases state “structural alterations” require permission. In these cases, you should err on the side of caution and discuss your proposed alterations with a solicitor, to ensure if you’ve applied for permission if it is required.
What does a Licence to Alter do?
In the very simplest sense, a Licence to Alter provides permission for a leaseholder to complete work to their flat – but they do so much more than that!
A good Licence for Alterations will commonly outline:
- The extent of the work agreed
- Whether any additional work (e.g., those required by building control) can be completed under the licence without seeking further permission.
- An obligation for the leaseholder to secure other types of permission (e.g., planning permission, building control consent) for the changes
- The notice period the leaseholder has to provide before starting the work
- A deadline to start or finish the alterations
- Restrictions on when the work can be completed
- A right for the freeholder to oversee or monitor the work
- An obligation to pay for repair or redecoration of communal areas that are affected by the work
- An obligation for the leaseholder to pay the reasonable costs of the freeholder in relation to the Licence for Alterations and related activities – such as monitoring the work
It will be the responsibility of the solicitor you have instructed to complete your Licence to Alter to advise on whether these clauses required by your freeholder are reasonable and suitable, given the scope of the work that you intend to complete.
When can my freeholder say “No” to my proposed alterations?
This is very dependent on the exact wording of the lease – which is why should use a solicitor specialising in Licence for Alterations to review this as part of the process.
The restrictions in your lease are likely to fall into one of the following buckets.
Absolute Covenant: If your lease says that you simply cannot make any alterations to your flat, the freeholder is under no obligation to give you permission to make alterations. If you wanted them to vary the lease to allow you to make alterations, then they could charge a price (known as a premium) to do this.
Fully Qualified Covenant: If your lease includes a clause which states something like “alterations shall not be made without the landlord’s consent in writing which cannot be unreasonably withheld” then this is known as a fully qualified covenant. In this case then your freeholder can’t refuse your Licence to Alter without a good reason. Your solicitor can advise you on what constitutes reasonable grounds for rejecting a Licence to Alter. Examples might include if it would cause structural issues to the building, or it would devalue other property around it.
Qualified Covenant: Even your lease doesn’t explicitly include the words “unreasonably withheld” then it is usually considered implicit that consent can’t be unreasonably withheld. The same applies as the Fully Qualified covenant above.
When can my freeholder charge for the Licence to Alter?
Except for covering their costs (explained below) if the freeholder can’t usually charge a price to approve your alterations – if you have a fully qualified or qualified covenant.
There are a few exceptions to this rule.
The first is if you have an Absolute Covenant in your lease which says alterations cannot be made.
The second is if you’re apply for the permission retrospectively. Whatever your lease says, your freeholder has no obligation to provide you with permission in this case, so they can charge to say yes.
The third is if the freeholder can reasonably say no. An example would include is if your alteration would devalue other property. They could charge you a fee to say yes, which compensated them for waiving their right to say no.
Finally, if you are asking to alter property that you don’t own then your freeholder can say no to that as well – or charge to sell you the affected property. We had a case where a client wanted to knock through an external wall that was owned by the freeholder. The freeholder wanted £3,000 to sell the wall to the leaseholder.
How much does a Licence to Alter cost?
The first thing that you will have to pay for with a Licence to Alter is the costs of your own professional advisors. These will be very dependent on the alterations you wish to make, and the level of interaction required with your freeholder’s professional. A good starting point is that a basic Licence to Alter will cost around £750+VAT in legal fees.
You then also must pay your freeholder’s fees.
This will start with an administrative fee to your freeholder to cover their costs in considering the application. For example, Westminster Council charge leaseholders £550 as an application fee.
You will also have to pay their professional fees, and this is likely to be very dependent on what is required. Clearly if they deem it required and reasonable to carry out an Asbestos Survey or require a Structural Engineer’s Report, then this will be more expensive than if it is only legal work required. Again, using Westminster Council as an example, their legal fees are £800.
What are the steps for getting a Licence to Alter?
Step 1: Appoint a specialist Licenced for Alterations solicitor to complete the work for you – they will be worth their weight in gold. An expert solicitor will help minimise the freeholder’s legal costs, keep your freeholder reasonable and avoid costly rectification work
Step 2: Check if your need a licence: Your solicitor will check your proposed plans and review the lease. They will see if you need a Licence for Alterations for the changes
Step 3: Your solicitor will ascertain who your freeholder is and get their correct address for service. They will need this when they apply for the Licence to Alter.
Step 4: Your solicitor will contact your freeholder with sufficient information for them to consider the Licence to Alter in principle. Some institutional freeholders have specific forms to do this. Many require an admin fee.
Step 5: Usually it is the freeholder’s solicitors who will draft the Licence to Alter document, but before they do this, they’ll require you to commit to their legal fees.
Step 6: This document will be agreed between your solicitor and your freeholder’s solicitors. Sometimes additional professionals are needed to supply information to be contained within this – such as architectural plans for the proposed changes.
Step 7: Once the document has been signed by both parties, your solicitor should lodge a copy of the document at the Land Registry. While there is technically no requirement to do so, it means that you will always have an electronic record. You should keep the hard copy too
Step 8: Ensure that you comply with the Licence to Alter, including providing notice to your freeholder of when you intend to start work.
How long does it take to get a Licence for Alterations?
The answer to this is slightly “how long is a piece of string?”. It is very dependent on how complex your proposed alterations are and how quickly your freeholder’s professional’s work.
In many cases we’d expect a Licence to Alter to take two to three months to complete, but it can be longer.
Again, this is why it is valuable to appoint a solicitor experienced in apply for a Licence to Alter to complete your work, so they can minimise the back-and-forth with the other side, and keep things moving.
What happens if I fail to get a licence for my alterations?
If you make an alteration to your flat without first seeking a Licence to Alter, you could find that you have breached your lease.
The very best likely outcome is that your freeholder would require you to enter a Retrospective Licence to Alter, where they give consent for your alterations after the fact. Because the work will have already been completed, you will be on the back foot. It is possible they will require you to pay for additional professional support (e.g., a structural engineer). Because they’re under no obligation to approve retrospective works, they can also charge you a price to agree to them at all.
We have also heard of cases where the freeholder has required the leaseholder to essentially reverse the alterations – which again could have costly implications.
Finally, in certain circumstances the freeholder can seek forfeiture of your lease and essentially take your flat back. However, it is worth noting that this draconian action happens very infrequently and can only happen at the end of a very long legal process. If you’ve completed unauthorised works, you should seek legal advice but should not be concerned about forfeiture at this stage.
Choosing a Licence to Alter solicitor
Getting formal legal advice from a solicitor on your licence to alter is a must.
We often direct people to Alex Watts at Gatling Solicitors Licence to Alter support, because it is an area that he has extensive experience. He is well reviewed and reasonably priced.
Alternative, you can check out the ALEP Website for a full list of Licence to Alter solicitors.