Residential leaseholders frequently wish to improve, modernise or reconfigure their homes. Whether it is removing an internal wall, installing wooden flooring, or re-positioning a kitchen or bathroom, such works are often seen as a natural incident of home ownership. However, in leasehold properties, the right to carry out alterations is often restricted by the terms of the lease.
Unauthorised alterations are one of the most common sources of dispute in residential leasehold property. Leaseholders often proceed without consent on the assumption that the works are minor, purely internal, or unlikely to attract attention. In reality, depending on the nature of the alterations, carrying out works without the consent/ licence from the freeholder can expose leaseholders to significant legal and financial risk.
This article explains how alteration covenants operate in residential leases, what constitutes an alteration in law, the consequences of proceeding without consent, and how breaches may be resolved.
Leasehold ownership and the role of the lease
Unlike freehold ownership, a leasehold interest is a contractual right to occupy property for a fixed term, subject to the covenants set out in the lease. The lease governs what a leaseholder may and may not do with the property and typically includes detailed restrictions on alterations.
Alteration covenants exist for good reason. Residential buildings often involve shared structures, services and insurance arrangements. Unauthorised works can affect the structural integrity of the building, compromise fire safety, increase noise transmission, or invalidate insurance cover. Freeholders and management companies therefore retain control over alterations to protect the building as a whole and the interests of other leaseholders.
Failure to comply with an alteration covenant will amount to a breach of lease and can expose the leaseholder to enforcement action and costs.
Types of alteration covenants in residential leases
The starting point in any dispute concerning alterations is the precise wording of the lease. Not all alteration covenants are the same, and the legal consequences depend on how the covenants are drafted.
Some leases contain absolute covenants, which prohibit alterations entirely. If a covenant is absolute, the landlord is under no obligation to grant consent, and the leaseholder has no right to carry out the works at all. Often, such absolute covenant relate to alterations of a structural nature but depending on the wording of the clause sometimes relatively minor non-structural works may fall within such a prohibition.
Leases commonly contain qualified covenants, which allow alterations only with the landlord’s prior consent. In these cases, consent must be obtained before works begin. Where the covenant is qualified but silent on reasonableness, the landlord may refuse consent, subject to some statutory controls.
Some leases contain a fully qualified covenant which provides that consent is not to be unreasonably withheld. In these circumstances, the landlord must have proper and reasonable grounds for refusal. However, even where a landlord is obliged to act reasonably, consent must still be sought in advance, and the leaseholder cannot assume that consent will inevitably be granted.
Disputes often arise because leaseholders focus on the nature of the works rather than the wording of the lease. In practice, even minor works may require consent if they fall within the scope of the covenant.
What counts as an “alteration”?
A frequent point of contention is whether particular works amount to an alteration at all. Leases rarely define the term exhaustively, and disputes often turn on interpretation.
In general, an alteration involves a change to the physical character of the property. Structural works, such as removing walls or altering load-bearing elements, will almost always qualify. However, non-structural works may also constitute alterations if they affect the fabric, layout or services of the flat.
Common examples of works that often require consent include the removal or relocation of internal walls, the installation of hard flooring, alterations to plumbing or electrical systems, and changes to the layout of kitchens and bathrooms. Even works that appear cosmetic may be caught, depending on their permanence and impact.
By contrast, purely decorative works, such as painting or replacing carpets, are less likely to amount to alterations, although this again depends on the wording of the lease.
Leaseholders should be cautious about assuming that internal works are exempt from the requirement for prior consent. The fact that works are not visible externally does not mean that they fall outside the scope of an alteration covenant.
Licences to alter and the need for formal consent
Where consent is required, it is typically granted by way of a formal licence to alter. A licence is a legal document that records the landlord’s consent and sets out the conditions on which works may be carried out.
Licences commonly include detailed specifications of the works, requirements for professional supervision, obligations to comply with planning and building regulations, and covenants to reinstate the property at the end of the lease if required. They will also usually require the leaseholder to pay the landlord’s legal and surveyor’s costs.
Proceedings on the basis of informal discussions, emails or verbal assurances is risky. Consent should always be documented properly. Without a formal licence, a leaseholder may later struggle to prove that consent was granted, particularly if the freehold changes hands or management arrangements are altered.
Carrying out works without consent
Unauthorised alterations most often arise where leaseholders proceed without consent because of time pressure, cost concerns, or a misunderstanding of their obligations. In some cases, works may have been carried out by a previous owner, with the current leaseholder inheriting the problem.
Regardless of how the situation arises, carrying out works without the required consent places the leaseholder in breach of lease. That breach exists even if the works are well executed, compliant with regulations, or welcomed by neighbours.
Legal consequences of unauthorised alterations
The legal consequences of unauthorised alterations can be serious. A landlord may be entitled to require reinstatement of the property to its original condition, even if the works have improved the flat. This can involve significant expense, particularly where structural changes are concerned.
Landlords may also seek damages for breach of lease, including compensation for any loss suffered and recovery of professional costs in investigating the works. Many leases allow landlords to recover their legal and surveyor’s fees as an administration charge, even where proceedings are not issued.
In urgent cases, a landlord may apply for an injunction to prevent works from continuing or to compel remedial action. Injunctive relief is discretionary, but the courts will often intervene where unauthorised works pose a risk to the building or other occupiers.
Unauthorised alterations can also cause practical difficulties when a leaseholder seeks to sell or remortgage the property. Buyers’ solicitors routinely raise enquiries about alterations, and lenders may refuse finance if works have been carried out without consent. Resolving the issue at that stage can be costly and time-consuming.
Forfeiture and residential lease protections
Forfeiture is often raised in discussions of lease breaches, but it is important to understand how it operates in residential leases. While forfeiture remains a legal remedy for breach of covenant, it is subject to significant statutory protection.
Before forfeiture can be pursued, the landlord must generally establish the breach. The tenant must have admitted the breach, or the Residential Property division of the First-tier Tribunal (Property Chamber) in England, a leasehold valuation tribunal in Wales, a court or arbitral tribunal must have finally determined that a breach has occurred.
The landlord must serve a formal section 146 notice on the tenant requiring the unauthorised alterations to be remedied.
Leaseholders also have the right to apply for relief from forfeiture, and the courts are reluctant to deprive residential occupiers of their homes where breaches can be remedied.
In practice, forfeiture is rare in cases involving unauthorised alterations alone. However, the court does have the power to make an order for forfeiture of a long residential lease in circumstances where the landlord has followed the statutory procedures and the court considers it appropriate to make such an order. The possibility of forfeiture can be a powerful negotiating tool, and leaseholders should not dismiss it as an empty threat.
Retrospective consent and regularising breaches
In some cases, unauthorised alterations can be resolved by obtaining retrospective consent. This involves applying for a licence after the works have been completed.
Landlords are not obliged to grant retrospective consent, even where they might have approved the works in advance if consent had been requested at the appropriate time before commencement of any alteration. Where consent is granted, it is often subject to conditions, including the payment of higher fees, provision of surveys or certifications, and, in some cases, remedial works.
Leaseholders should be aware that applying for retrospective consent does not eliminate the breach unless and until a licence is granted. Strategic advice is often required to manage negotiations and minimise exposure to enforcement action.
The importance of early legal advice
Situations involving unauthorised alterations are rarely straightforward, and the risks are often underestimated. Early legal advice can help leaseholders understand their obligations, assess the seriousness of any breach, and identify the most effective way to resolve matters.
For landlords and managing agents, timely advice can assist in enforcing covenants proportionately and avoiding unnecessary escalation.
Sonuç
Making changes to a leasehold property without the required consent can have far-reaching consequences. What may appear to be a minor improvement can result in a breach of the lease, enforcement action, and significant expense.
Leaseholders should always check the terms of their lease and obtain proper consent before carrying out works. Where alterations have already been made without consent, early professional advice can often prevent matters from escalating and help regularise the position on acceptable terms.
Specialist property litigation advice is essential in navigating these disputes and achieving practical, commercially sensible outcomes.
Mülkiyet Dava Konuları: Bize Ulaşın
Ben Lewis is an associate solicitor in RFB’s litigation department.
Bu konuyla ilgili sorularınız için lütfen Ben Lewis ile e-posta yoluyla iletişime geçin B.Lewis@rfblegal.co.uk veya 0203 947 8892 numaralı telefondan ulaşabilirsiniz.
Ben Lewis
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