QUESTION
I am a freeholder. I took on a new block 6 months ago and did a routine internal inspection of all the flats 2 months ago. During the inspection, I noticed that a stud partition had been put up, altering a large bedroom into 2 smaller ones. When I asked the tenant whether he had obtained the freeholder’s permission to make the alteration, he denied having done the partitioning work – insisting that he bought the property like this 8 years ago. All the evidence contradicts what he says – citing the alteration firmly within his period of ownership.
The evidence I have is as follows: A statement from another flat owner in the block confirming that she witnessed the tenant making the alteration; archived marketing brochures demonstrating that when the tenant bought the property 8 years ago it was advertised as a 1 bedroom flat; archived marketing brochures demonstrating that this tenant has attempted to sell the flat in the last couple of years and has advertised it as a 2 bed. In any case, the original floor-plan for the flat shows that it was created as a 1 bed not a 2 bed.
My questions are these: Does the stud partitioning and creation of a 2nd bedroom constitute a structural alteration for which the freeholder’s permission is required? If so, what remedies are open to me?
ANSWER
LEASE COVENANTS
Without having sight of the lease it is difficult to advise on the matter.
If the lease is silent on the question of alterations then the tenant is free to carry out any it choses. However leases usually include 3 types of covenants in relation to alterations works: (1) absolute (2) qualified or (3) fully qualified.
1. An absolute covenant prohibits the alterations absolutely. Only if the landlord is prepared to waive the clause will the tenant be able to make alterations.
2. A qualified covenant prohibits alterations save with the landlord’s consent;
3. A fully qualified covenant provides that the alterations may only take place with the landlord’s consent which, the clause specifies, must not be unreasonably withheld.
It is not uncommon for the clauses to include aspects of each of these types of clause.
In relation to qualified covenants against alterations statute has intervened to render them fully qualified covenants. Section 19(1)(a) of the Landlord and Tenant Act 1927 (1927 Act) provides that where such a covenant is subject to the landlord’s consent there is an implied proviso that consent shall not be unreasonably withheld.
Financial loss it not a good enough reason to refuse consent unless the tenant has refused to compensate the landlord for it - Section 19(3) of the 1927 Act. In such a situation a landlord could ask for compensation for the damage to the reversion as a condition of granting consent otherwise he risks refusing consent unreasonably.
WHETHER STUD PARTITION IS STRUCTURAL?
Based on the statement provided, the new wall separating the bedroom appears to be non-loadbearing and is therefore not considered structural. However, as the wall is separating two rooms the wall will need to comply with the requirements of the building Regulations, particularly regarding fire protection/compartmentation.
As Above, the requirement to obtain Landlord’s Consent for this alteration depends on the covenant n the Lease. Some leases restrict “Structural Alterations” while other leases restrict internal layout alterations and/or alterations whatsoever (whether absolute, qualified or fully qualified).
If the lease restricts only structural alterations, the new partition may not require landlords consent but this would depend on whether there are other lease clauses that may be affected such as complying with statutory regulations (e.g. Building Regulations).
REMEDIES
As set out above, it is difficult to advise on potential remedies without sight of the lease and the wording it contains in relation to alterations.
If the lease is silent on alterations – the tenant is free to carry out alterations it choses
If the lease prohibits alterations whatsoever (whether structrual or non-structrual) then arguably landlord’s consent should first have been obtained. If it was not obtained, it may be argued the tenant is technically in breach and the landlord may be minded to request the tenant make an application for retrospective consent. If the tenant refuses to make the retrospective application for consent, then arguably, the landlord would be entitled to take enforcment action such as forfeiting the tenant’s lease (subject to any possible arguments that the landlord has waived his right to forfeit).
Forfeiture:
We note you have recently purchased the block. Was an inspection undertaken prior to purchase of block? If so, were the breaches not picked up before purchase?
Was the previous landlord asked to confirm whether they were aware of any breach of lease issues?
What is forfeiture?
Many leases have a provision which allows a landlord to bring the lease to an end if the tenant defaults on any of their covenants in the lease. This is called “forfeiture”.
Forfeiture has become a long and protracted procedure these days due to changes in the law. It is unlikely you would obtain a forfeiture order based on the information provides due to relief from forfeiture applications that can be made by the tenant. In addition, it does not sound as if the works have affected the structural integrity of the building nor have you received complaints from the tenants as a result of the works.
Waiver of Forfeiture
A landlord might decide, for whatever reason, that it is not in their interest to forfeit a lease and might chose to respond to the tenant’s breach in a different way i.e. granting retrospective consent for works.
Despite this freedom, the common law requires the landlord, on discovering the tenant’s breach, to make a choice: either (1) forfeit the lease or (2) allow the lease to continue.
If, knowing that there has been a breach of the lease which would give rise to a right to forfeit, the landlord does some act which is compatible with the lease continuing, the landlord will be deemed to have chosen not to forfeit the lease and will lose the right to do so. This situation is referred to as “waiver” of forfeiture.
Since becoming aware of the breach have you requested monies due under the lease i.e. ground rents, service charges? If you have and the monies have been accepted, arguably, the rights to forfeit would have been waived.
Subject to having sight of the lease, the simplest way to resolve matters would be to request the tenant make an application for retrospective consent.
