Is a Tenant Able to Challenge a Freeholder’s Fee for Giving “Retrospective” Consent to Alterations?

A recent Upper Tribunal decision has provided useful guidance where a freeholder seeks to charge a fee for providing retrospective consent to alterations to a flat. In Avon Freeholds Limited v Alexander Garnier [2016], the tenant had carried out works without seeking the consent of the freeholder as was required under the terms of the lease, leaving the tenant in breach of their lease.

Unsurprisingly, the purchaser of the flat wanted the position regularised prior to the purchase; the tenant therefore sought the consent of the landlord.

Once an inspection had been carried out, the freeholder set out its requirements to provide consent.

The requirements were that the lessee would need to pay:

1. £1,000 plus VAT in legal costs; and
2. £5,000 for the consent itself.

The tenant sought to negotiate however the freeholder stood firm, and with the imminent risk of losing the sale, the tenant emailed to agree to the fees. The tenant later took the matter to Tribunal on the basis that the fees were an unreasonable administration and was initially successful. However the freeholder appealed.

The Upper Tribunal found that at the point at which the freeholder set out its requirements there were a number of options open to the tenant in how to respond, two of which might have entitled the tenant to challenge the fees at a later date. However the agreement by email to pay the fees meant that the Tribunal had no jurisdiction to consider the reasonableness of the charge and the appeal was allowed, meaning the tenant had no recourse.

Whether you are a leaseholder or freeholder, there are a number of ways of dealing with alterations carried out without consent. The above case illustrates the importance of being properly advised to ensure the correct strategy is adopted.

If you have any questions, would like formal advice or wish to set up a meeting with us then please contact:

Ricky Coleman – Solicitor in the Property Litigation Team at Dean Wilson LLP

01273 249251  rfc@deanwilson.co.uk