In October, we held our latest Kensington breakfast seminar which focused on consultation with the tenant for landlord works and alterations to flats.
The consultation process under section 20 of the Landlord and Tenant Act 1987 deals with the process where tenants are to make a contribution to the cost of works to a building. This has implications for freeholders, managing agents and tenants alike. A solicitor in our specialist lease extension and enfranchisement team, Shabnam Ali-Khan, highlighted that any contribution by the tenants toward works that exceed £250 requires consultation. It is also the case that, when a landlord enters into a contract, for example with a managing agent, this can also fall under section 20 requirements if it is for a period of more than 12 months. Notably, in the recent case of Corvan (properties) Lt v Abdel-Mahmoud (2017) it was established that a rolling contract which would continue for more than 12 months if it was not specifically terminated and could only terminate after 12 months, was caught by the legislation.
The session also touched on the subject of alterations, when consent is needed and what freeholders and tenants can do to ensure that they do not fall foul of the lease requirements or of the Landlord and Tenant Act 1987, where works may go beyond the tenant’s demise. Alan Edwards, partner in our lease extension and enfranchisement team, commented “where no consent has been sought prior to the works being carried out, there is no obligation on the landlord to provide retrospective consent”. This, in turn, can have a bearing on any subsequent application for a lease extension under the Leasehold Reform Housing and Urban Development Act 1993 because, under Schedule 6 Para 3(i)(c) Schedule 13 4A(i)(c) such works can be considered improvements on the flat and push up the premium, whereas authorised works cannot.
Unauthorised alterations can also cause difficulties upon the sale of the flat, although there are options available to sellers where they have failed to obtain consent to works and are trying to sell their flats. One of the points that must be considered where there is no consent, is that this must be disclosed to the buyer. However, should the alterations have been carried out without consent over 12 years ago, the landlord would not be able to forfeit the lease on the basis of such a breach, due to S.15 (1) Limitation Act 1980 and a buyer should therefore not be deterred by the lack of consent in this instance. Alternatively, indemnity insurance can be obtained, although sellers must be aware that they will not be able to obtain insurance if they have already approached the landlord for retrospective consent, thus making them aware of the breach. Sellers should be careful to seek advice from their solicitor before attempting to deal with any lack of consent.