Rooftop Developments: are they worth it?

The value of property has resulted in many landlords considering the possibility of building a ‘penthouse’ on top of an existing block of flats.

Assuming the local planning authority is willing to grant consent and construction is feasible, can the landlord just proceed?

Unfortunately not.  If every flat owner in the block supports the proposal, fine, but if one or more object there may be a number of legal obstacles to overcome.

The first thing to establish is who owns the roof, airspace and associated areas.

If the roof has not been leased off with one or more of the flats or the premises underneath, the landlord will usually retain the freehold ownership of the roof and all airspace above it.  Thus, in principle he can develop.

The situation becomes more complicated where the flat owners have formed a right to manage company which has responsibility for managing the block of flats, including the roof.  Does that prevent the landlord building a rooftop flat?

In the absence of a specific provision in the flat leases preventing such development, it seems not although case law is developing in this area.

Further issues may arise if the landlord does not want to fund the development himself but wants to sell the roof space to a developer.

The danger here is that an outright sale to a third party of the roof space may trigger the flat owners’ rights of first refusal.  The legislation imposes an obligation on the landlord to notify the flat owners of the proposed sale giving them a right to make an offer to buy the roof space themselves.

Sometimes a landlord may try to side step these provisions by entering into a joint venture agreement with the developer to obtain planning permission and to construct the dwelling but subsequently granting the first lease of the new flat himself.

However, if the flat owners are either not offered the right of first refusal or they are but cannot afford to buy, they will have to look at other options to prevent the development.

The most likely source of help will be the flat leases and more particularly whether the leases contain easements (rights) which would be materially affected if the development proceeds.  Examples would include rights of light to a window or stairwell or rights of way over the roof or rights to use the roof.

If easements are a stumbling block then the landlord may be in a difficult position unless the majority of the flat owners agree to the development.  In such a situation there are some statutory powers available which could be used to vary the leasehold easements.  However, such powers are relatively obscure and untested.

This is a complicated area and ultimately the landlord will have to assess, with the assistance of an appropriately qualified solicitor, whether the financial return to be achieved justifies the time and expense overcoming any legal issues that may exist.

For advice and support please contact us, and our Property Team will be happy to help.

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