Newsletter | December 2011 | Structural problems for shared buildings

Adam Gross from Mishcon de Reya reminds us that strutural changes have a knock-on effect in shared buildings.

Like cats and dogs, property owners like to mark their territory, many by knocking seven bells out of a newly purchased apartment. However, other leaseholders in that block may be right to stop the bulldozing purchaser in his tracks, get him to undo the works or sue him for damages. The landlord can often be caught in the middle and needs to consider carefully its potential liability if other leaseholders complain about the works.

Most residential long leases allow non-structural works but prohibit structural alterations. This has caused confusion in the property field and, for over a century, landlords and leaseholders have fought over the definition of 'structure'. It is more than works to the foundations, load bearing walls and roof.

The word 'structure' is not legally defined. The lease will rarely define it but may provide indications as to the meaning, so should be checked by you or your lawyer. Each building and every situation is different. But following a myriad of cases, subject to what the lease says, works are likely to be structural if they affect:

1. The essential stability and shape;
2. The material or significant elements in the overall appearance of the premises; and
3. Parts belonging to the basic fabric as opposed to the decorations and fittings.

Let’s put this into an example and consider practically what can be done.

Mr Bulldozer recently purchased two flats, one on top of the other, and wants to turn them into a duplex apartment. In doing so, he needs to cut a slab out of the floor that separates the two premises so that he can install a connecting staircase. All leases for the building are identical and state:

• If one leaseholder has breached its lease, another leaseholder can require the landlord to take action against that breaching leaseholder.
• Non-structural works are allowed.
• Structural works are not allowed.

 The lease is ambiguous as to what 'structure' means. There is no definition and the other clauses do not help.

Mr Bulldozer asks the landlord for consent to do the works. Should the landlord consent?

The components of a floor are made up of various elements; for instance, the floorboards and a subfloor and joists or concrete screed. The decorative floorboards are, in my view, non-structural. However, the subfloor, joists and cement screed are likely to be structural. They probably form part of the basic fabric of the premises and to cut a hole in it is likely to affect the material or elements in the premises' overall appearance and may also affect its stability. Therefore, the landlord should probably not grant consent.

Practical solutions

If any works are consented to, whether structural or not, this should always be reflected in a licence for alterations.

If the landlord is minded to grant consent to the structural works regardless, it should insist on a provision that allows it to require Mr Bulldozer to undo the works and/or indemnify it against all claims, losses and costs if another leaseholder sues it for being in breach. If that is agreed, it is then up to Mr Bulldozer to consider whether to carry out the works and risk being required to undo them and/or pay substantial damages to the landlord and/or other leaseholders.