Most leases require consent from the freeholder in order to carry out any alterations/repairs in the form of a Deed of Variation (also known as a Licence for Alteration) which then becomes part of the title deeds.
 However, there are no statutory guidelines on what the freeholder can charge for granting such consent so whilst at the time this may not be considered important, when it comes to selling the property and permission has never been granted, then the lease has automatically been rendered defective.

Correcting it in order to make it saleable often runs into hundreds of pounds in legal fees, with a timeframe of several weeks. This has led to buyers getting the freeholder to agree to a retroactive Deed of Variation approving any risk and which they pay for in order to either prevent the sale to from being be delayed for months or fall through entirely.

FREEHOLDER CONSENT

Freeholder consent to alter covers any of the following:

1. Changing the face of the building such the changing windows or the insertion of a skylight;
2. The cutting through of any walls;
3. The removal of either the whole or part of any wall, regardless of whether it's internal, external or a partition;
4. The installation of a new kitchen, bathroom, toilet, shower etc which is likely to increase the amount of waste water/sewage being removed from the flat; modification to communal services such as the re-routing of a radiator attached to a communal heating system or removing a radiator attached to a communal heating system.

LOCAL AUTHORITY CONSENT

If a formal licence from the council is required, it will usually include the following conditions, where appropriate:

1. Appropriate insurance in order to cover any consequential damage to adjacent flats, common parts or neighbouring houses.
2. Obtaining permsisions and consents and paying necessary legal fees to local authorities and other statutory bodies;
3. Indemnifying the freeholder and adjacent flats against all damage or costs;
4. Restriction of working hours to between 9am to 5pm Mondays to Fridays inclusive: No working on weekends or Bank Holidays;
5. All materials, equipment and rubble to be kept within the flat or to be removed completely off site, not dumped into the common areas;
6. Any and all damage cause to common parts to be repaired.

SUMMARY

The need of buyers to request retroactive Deeds of Variaton has had the unfortunate side effect of creating a market where landlords can (and do) regularly demand hugely inflated sums for granting retroactive consent which in turn allows them to negotiate higher asking prices for the freehold when leaseholders want to collectively enfranchise, i.e. buy the freehold themselves.

Most leases will have one (or more) of 3 assignment conditions that must be complied with. This is in order to allow the managing parties of blocks of flats to keep track of who the leaseholder is and be able to continue to collect ground rent and service charges smoothly and without interruption.

1. A typical lease will require that the sale or mortgage of a flat cannot take place without the prior written consent of the landlord, consent that must be obtained before completion. A lender will not accept restrictions that either absolutely prohibit (do not allow) assignment or mortgage of the lease, or else require consent to assignment or mortgage, (unless consent cannot be unreasonably withheld). Therefore this is often ignored but the assignment usually remains legally valid.
2. Sometimes a lease will require a Deed of Covenant which is a document the buyer signs agreeing to obey all the original lease terms on completion of the sale and through the duration of ownership. This creates a contract that compels the buyer to provide his details as the new leaseholder and enables the registration of the purchase to proceed at the Land Registry.
3. There may be a requirement to register the assignment, where the leaseholder has the right to sell the lease but the lease requires that the freeholder be notified of the sale within 28 days.

When a leasehold flat is being purchased with the intention to sublet, the mortgage offer should be a buy to let offer. If the offer is not clear on this then it should be reported to the lender and further instructions awaited. Once a buy to let mortgage offer has been offered, it will usually set out the requirements of the lender in terms of a tenancy agreement.Whilst each lender is different, most of them require that any tenancy is an Assured Shorthold Tenancy. This is the contract between the landlord and tenant and is usually for a term of no more than 6/12 months. This provides the landlord and lender quick and easy repossession.

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Buildings insurance is a legal requirement and is a condition of taking out a mortgage. It covers the structure of the building and the common parts that the leaseholders do not own individually, such as the roof, foundations, load bearing walls, gardens, landings, and stairways. It can also cover other permanent fixtures outside, such as gates, fences, drives and swimming pools as well as fixtures within the property such as shower trays and baths. The policy should however be checked as the latter is rather a grey area.  A sample of other types of insurance that can be covered by buildings insurance are:

1. Contents of Communal Areas
   For example communal carpets
2. Trace & Access Cover
   This is important because investigating the cause of a leak for example may involve stripping a kitchen to find and then repair a pipe.
3. Accidental Damage to Underground Services and Cables
   This insures gas, electricity, oil or water, as well as sewage pipes, against accidental damage. They are not insured against wear and tear.
4. Emergency Repairs
   Many policies cover the cost of temporary work.
5. Legal Expenses
   It is important to note that if this type of policy is issued solely in the name of the freeholder than this may not defend the management company

Note: Although not mentioned in the CML handbook, a solicitor should also insist on seeing a copy of each flat owner's insurance to ensure that it both exists and is sufficient. If copies cannot be supplied then a solicitor should insist on contingent buildings indemnity insurance.

RESPONSIBILITY TO INSURE

Leaseholders

Where the lease requires that the responsibility to insure the building falls to the leaseholders, the lease must contain an enforceable 'covenant to insure' (promise) by the landlord or management company that will enable them to act against any other leaseholders that don't pay. The problem with this however is that the covenant usually requires any leaseholder that wants it enforced is required to pay for any costs incurred by the landlord or agent in taking any action.

Managing Agent

If the lease requires the managing agent to insure the building and maintain the common areas then the agent must be granted a legal right to enter the property, either by way of a lease of the common parts or the company being made up of the leaseholders of the building as in the case of an RMC/RTM company. If it is not then the lease should contain a covenant by the landlord to take over the management company's responsibilities in the event that it fails.

If the lease was granted before 1st September 2000 and does not meet these requirements but the conveyancer is nonetheless satisfied that the arrangements which are in place are sufficient then the lender will be happy to proceed provided that the conveyancer is prepared to give a clear certificate of title.

It is also important to note that if the managing agent arranges the insurance they may need to be regulated by the FSA depending on whether what they do meets the definition of a 'regulated activity'.