Altering a listed residential building

Nick Mann identifies how the process for a residential leaseholder seeking to carry out alterations differs in respect of listed premises. In a leasehold property, the lease is the legal document that sets out the terms the leaseholder must abide by during the term of the lease. There are different types of leases, but the covenants in each lease are essential to any type as they act as an agreement between the landlord and leaseholder in relation to the property. In particular, the covenants govern what alterations (if any) can be permitted with the landlord’s consent. The covenants are important as they provide the landlord with an element of control around certain matters (works, assignment, sub-letting, pets, etc). The ability to make alterations to buildings subject to a lease is becoming more topical in the context of the drive to retrofit and alter the purpose of many buildings, as a more ESG-friendly approach to the physical environment compared with the demolition and reconstruction of a building. Equally, the pressure on the residential market in the UK means many freeholders, leaseholders and landlords are considering ways to add additional capacity within existing buildings and housing stock. Alterations clauses and licences In a standard residential lease, there will be an alterations clause, which sets out under what terms the landlord is willing to permit alterations. It is important to check the wording in the lease, as each lease will differ in what types of change, whether structural or otherwise, can be carried out. Most leases will at least contain a clause requiring the provision of prior written consent before any works can be carried out. Some will include wording such as “not to cut, maim or injure nor to make any breach in any part of the structure of the demise nor to make any alteration or additions whatsoever to the plan design or elevation of the property nor to make any openings in the property”. This clause will likely result in the need for a licence to be issued by the landlord before any alteration works can commence. Therefore, common practice is to approach the landlord with proposed plans and specifications and follow a careful process to secure the licence. As part of this process, the leaseholder will need to bear the cost of the landlord’s legal fees and the surveyor’s fees. The landlord should employ a surveyor to check the property for any previous unauthorised alterations, but also to confirm the agreement or, if necessary, the suggested changes to the works to be done. More recently, sound-proofing materials for wooden flooring have become increasingly important, especially when wooden flooring is being used for the first time, to prevent any complaints. Failure to deal with this potential issue could result in the landlord relying on the licence to make changes to ensure any sound-deadening materials are used. Once the surveyor has confirmed the works will be acceptable to the landlord, the landlord will instruct their solicitor to draft a standard licence for alterations. This licence will set out what works have been agreed and what standards the works must adhere to. It will also place an emphasis on the leaseholder carrying out the works making good any issues. Works requiring statutory consents, ie a Building Regulations completion certificate, will be a condition to be satisfied prior to the final checks by the surveyor, once the works have been completed. Typically, the leaseholder will also be required to cover an uplift in any building’s insurance if the works affect it in any way. What is different with listed buildings? If a building is listed, separate listed building consent will be required. A common misconception with listed buildings is that it is only the parts of the property that are listed (ie the listed features specified) that matter. In fact, it is the whole of the building, unless the list entry indicates otherwise. This means that the listing status covers the entire building, internal and external, and may also cover certain objects fixed to it, curtilage buildings or other structures. This is set out in paragraph 44 of the Planning Practice Guidance: Heritage Consent Processes. Therefore, consent will be required along with the other consents needed even for alterations that do not affect a listed part of a property. Maintenance works which might not at first be deemed to impact the fabric, design or appearance of the building may also require listed building consent, such as the way in which the works are carried out or the level, scale or intensity of the work proposed. They may not need listed building consent if carried out in one way, but may very well need such consent, which might even be refused, if carried out in another. Even the use of the wrong materials or tooling could have an impact on the building and affect the special interest of the building and/or damage it. Unauthorised works When purchasing a property, listed or not, where unauthorised works have been carried out, it is essential the appropriate questions are asked. The best way to safeguard against any unauthorised works is to instruct a reputable chartered surveyor (regulated by the RICS). They will be able to comment on the physical nature of the property and review the layout to comment on whether any changes have been made to the property. Any issues identified should be included in the survey report issued to one’s solicitor to raise as an enquiry with the seller’s solicitor during the process. If a planning enforcement notice were uncovered, one’s solicitor would need to check if the breach is still ongoing. Confirmation in writing should be obtained if the breach is historical but still entered on the local search, as it is unlikely to be removed and will arise when the time comes to sell. If it is a historical breach, the seller would need to resolve the outstanding issue with the local authority. This may require assistance from a planning consultant or architect, especially if appealing any decision (if recent) or if any regularisation works are required. Once resolved, confirmation in writing should be sought to prevent any confusion in the future. Tread carefully Ultimately, when dealing with listed buildings, it is important to instruct a specialist, experienced surveyor, or to separately instruct a heritage specialist who can assist with a surveyor’s assessment of the works. With listed buildings, it is the building owner who is responsible for any alterations, whether or not they carried out the works themselves, so it is important to ensure any works are appropriately planned and documented. This will avoid potentially very costly remedies in the future. Nick Mann is a partner in the residential real estate team at Seddons LLP