Here at Berry Lodge Surveyors, we regularly undertake Licence for Alterations also know as Licences to Alter on behalf of both freeholders and leaseholders. Unfortunately, one of the most common and reoccurring issues we are seeing freeholders request is a fee in order to grant the Licence of Alterations.
This fee, in some cases, well-disguised, in other cases flat-out asked for, covers nothing more than the freeholder granting a consent for the works.
Surprisingly, a number of freeholders appear to have gotten away with this over the years, and therefore it does not appear to be that uncommon.
I can unequivocally confirm, that a freeholder requesting such fee is a direct breach of the Commonhold & Leasehold Reform Act 2002, and in particular Schedule 11 of that Act. While the Freeholder can charge a cost, the costs cannot be unreasonable.
Now this begs the question, what is reasonable?
Reasonable costs, generally speaking, would include:
In the London area tends to be anywhere from £500-£1,000.
As above and depending on the work should generally be in the region of £500-£1,500.
Finally, any other costs which may be considered reasonable, however this very much depends on the works that are being undertaken, and could range from engineer review, acoustic surveys, access licences, or cleaning of communal areas.
Freeholders have no right to request for an agreement fee, licence fee, or consideration fee, as this fee effectively covers nothing more than the freeholder giving a right that the law already gives a leaseholder.
Licence to Alter matters can become confusing and complicated, and are often being agreed under the pressure of a timescale as the leaseholder will want to crack on with their proposed works as soon as they possibly can.
If you find yourself in a position where your freeholder is asking for a fee in order to grant a Licence to Alter and that fee does not cover specific reasonable costs, I would suggest speaking to an experienced surveyor at the first instance.
Here at Berry Lodge we pride ourselves in always offering the best service we can to our clients, and are pleased to confirm that we have thwarted a number of these type of freeholder requests over the past year.