One of the bigger growth areas in the property market in recent years has been the upsurge in roof or air space developments for properties. However, while they have plenty of advantages, there are also plenty of potential pitfalls as well. Here Maunder Taylor, who offer property dispute advice in Potters Bar and the surrounding area, look at some of the main pros and cons of extending a property in this way.
The Pros
Properly done roof/air space developments, particularly on a large scale, can add to the housing stock, which is particularly important in London and the south-east. There has been a good deal of political pressure in this area over the last few years, with upward developments being actively encouraged, alongside a relaxation of some of the planning laws.
Roof/air space developments will also add to the value of the building, so that everyone benefits – even existing tenants on the lower floors. It’s been estimated that such additions can add up to 5-10% on to the value of the existing properties in the building. And, once completed, they can reduce energy bills and service charges, as they can be split between a greater number of people.
These types of projects can also help existing residents avoid costly one-off charges like paying for a new roof, as the developer will need to ensure that the whole structure of the property is sound and secure.
And, for freeholders and landlords, there should be a profit to be made as well, thanks to the extra income stream from the new tenants. Studies have also shown that high-quality loft conversions can add as much as 20% to the overall value of a property.
The Cons
The legal position regarding roof and air space can be extremely complicated. Assuming the landlord owns the freehold of the property, they will usually retain ownership of the structure of the building – and that includes any roof space.
However, there are some exceptions to this. For instance, the roof space may have been ‘demised’ to one or more of the tenants; this should mean it has been included in the terms of a lease. Using the word ‘demised’ implies that the tenant(s) have the right of a ‘quiet enjoyment’ of the property.
‘Quiet enjoyment’ of the property may be difficult if the existing leaseholders have to put up with the physical disruption of extensive building works over a period of months, and (in worst-case scenarios) problems with flooding, drainage, damp and overall safety after the work has been completed.
There have been cases of inaccurate roof/air space plans being submitted for planning permission purposes, with staircases and doors in the existing building having to be moved to accommodate the new development.
Another potential complicating factor is the tenants’ right of first refusal, if the owner, landlord or freeholder is proposing to transfer out the ownership of the roof space as part of the development deal.
If it is classified as a ‘relevant disposal’ under Section 4 of the Landlord and Tenant Act 1987, then the leaseholders have the right of first refusal (that is, it must be offered to them on the same terms and at the same price as it was to be offered to the developer). Failing to comply with this element of the Act is a criminal offence and the leaseholders can compulsorily acquire the lease from the purchaser direct for the price it paid.
All of this means there is plenty of scope for disputes – and of freeholders embarking on a scheme then selling the property on, which can complicate the situation even more. For more details of one or two cases of roof/ air space developments which have gone wrong, check out our recent blog post here.
Property Dispute Advice in Potters Bar from Maunder Taylor
Roof developments can and do work, and they can benefit freeholders and leaseholders alike. However, to avoid any costly legal disputes, they need accurate, detailed plans, and viability reports on engineering, services, construction and safety matters, from the outset.
Support from the lessees of the existing flats (usually because they can benefit as well), together with reliable builders with adequate professional support, are all crucial elements as well.
Maunder Taylor offer a range of property and legal services, including house valuations, commercial property investment (and management), and property lease renewals advice in North London and Hertfordshire. To get in touch, follow this link and fill in the online form; you can also call us on 020 8446 0011 or
(for residential management queries only) 01707 665 666.