Question: I am applying for planning permission to build a house in a very large garden belonging to the basement flat I own. The flat is share of freehold. The other freeholders are demanding £20,000 each, with 10 per cent paid upon receiving planning permission. To me this sounds incredibly greedy but it is the only way they will agree to the house being built. Is this usual practice?
Answer: You will have a leasehold interest in both the flat and the garden, so you will be bound by the terms of your lease which will contain various covenants and restrictions, some of which are likely to relate to your garden and how it should be used.
There may be covenants restricting the use to a private garden, to be used only in conjunction with the flat, and these may prohibit it from being sold off separately.
There will probably also be a covenant preventing any building or alterations or additions without the previous written consent of the lessor.
Accordingly, not only will you need the written consent of the lessor to carry out the proposed building works, but the lessor will have to release you from any covenants affecting the usage of the garden. Given what you are planning, a deed of variation may be required.
I do not know how many flats there are in the building and consequently how many payments of £20,000 you will have to make, but look at the cost of developing the land and all associated costs such as planning applications, and then consider what the value of the house will be, to help you decide whether the project is worthwhile.
Do remember that your fellow lessees, who own the freehold with you, are likely to be inconvenienced and suffer aggravation and disruption while the building works are taking place, and that is probably one of the reasons why they are asking for a significant premium.
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These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.