Status Quo
The role of Landlords Surveyor regarding Licences to Alter when considering a Leaseholder’s intention to carry out alteration works are understood by all involved. The surveyor will follow the same processes of assessment, reporting and monitoring which is a very efficient and proven approach to service delivery. But is there room for improvement?
Surveyors thrive on process and structure which serves all parties very well. Having a structure and process in place is a very effective way of maintaining standards and ensuring that all due protocols are followed which helps to negate things getting missed. Having an entrenched approach to service delivery and LTA Landlord’s Surveyor Services being the same across the sector, it can leave little room for innovation resulting in a lack of flexibility of thought; especially when reporting output.
Things to Consider
The factors to consider when assessing whether a licence is required or whether a letter of consent will suffice or indeed whether works need any consent are numerous but will for the most part be dictated by the Lease. Other advice might be contained within a buildings own Rules & Regulations and / or specific Licence To Alter Guidance.
Let’s assume a licence is required and that you appoint a surveyor on behalf of the Landlord to advise and report on the lessees proposals which are deemed not insignificant. Three questions for you:
- What to do with the Surveyors Report?
- Who has responsibility for ensuring the Licence is accurate?
- Is a surveyor required to monitor and sign off the works?
Surveyors Report
The Report requires interpretation. This is likely to fall to the solicitor drafting the licence or the property manager. Be certain! Avoid the situation where no one has interpreted the surveyors report or worse still someone has misinterpreted the report. If in doubt ask the surveyor to explain.
Should the report be appended to the Licence? If one considers that the report is to the Landlord and the Landlords’ advisers I would argue against appending the report. Commercial contracts between two or more parties do not append the pre-contract advice that each party received, so why should residential licences be any different?
Think about what the Report is for. It is to advise the Landlord on Leaseholder proposals. The Report should set out the main issues in play, it should include a technical assessment of the lessee proposals and it should contain advice on any steps that need to be taken and any stipulations (whether technical, managerial or statutory based) that need to be included in the Licence documents. The Report should also clearly list all relevant documents that accurately illustrate the Lessee proposals. Extracts from the Surveyors Report can and should be incorporated into the Licence but wholesale inclusion of a Surveyors Report is more often than not, inappropriate.
Licence Accuracy
The Surveyors Report will provide a clear accurate record of the surveyors’ assessment but to really be of benefit the surveyor should be tasked with checking the final wording of the Licence before engrossment and signature.
Monitor & Sign Off
In most cases the surveyor should be retained to monitor the works as they proceed and sign off on completion. The surveyor is the one party who understands the technical aspects of any alterations proposals whilst also having the relevant experience and skill to check a licence to alter and to then further check that a lessee is doing what they are supposed to be doing.
We recommend that a surveyor be instructed or at least consulted on all licence to alter matters. The property manager with estate management expertise will provide valuable knowledge of the client and the property and the solicitor will provide the legal framework in which all parties must work. If these three parties work effectively together the landlord (and the lessee) will benefit.
Break the Reporting Mould
At Harris Associates we focus on using our time and expertise efficiency and focus our energies on where we can bring value to the License to Alter process. We bring value in terms of technical expertise, leadership, time and cost.
One of the ways we achieve better value is breaking away from the mould when it comes to assessing the leaseholder proposals and reporting. In ninety nine percent of our instructions where we act as Landlord’s Surveyor we do not prepare a report at all. Instead, we focus more time and energy on extracting information from the leaseholder, working with the leaseholder teams and where necessary persuading them to work up their proposals to an acceptable standard.
We can then reach the point where we are able to advise the Landlord that the scope is clear, in line with regulations and standards and consent can be granted. Our view when it comes to reporting is probably at odds to many of our surveying colleagues. To us, there seems little point or value in reporting to a landlord in a standard reporting format that recommends that some works are acceptable whilst advising in the same report that other works are not. How this actively assists in moving the consent process forward is debatable. Even more debatable is why it is considered appropriate to append such a report to a licence to alter. A report, which probably requires interpreting, that is addressed and directed to a landlord, which is then appended to a legal document between a landlord and a leaseholder! Bonkers!
Schedule of Landlord Requirements
What do we do different? We have developed a more dynamic and flexible (and more proportionate) approach to dealing with licences to alter. Unless specifically requested to do so, we do not produce the typical industry standard LTA Report. We use our time more dynamically to lead on LTA instructions, help solve problems, liaise with landlord’s and leaseholders directly and agree technical detail. Rather than produce a surveyors’ report we produce a Schedule of Landlords Requirements. The Schedule of Landlord’s Requirements sets out all relevant guidance, dos and don’ts, technical stipulations, references to relevant documents and importantly the content is property and flat specific and is a published document (so for the benefit of a landlord and a lessee) that is then appended to the LPA (Law of Property Act).
There are no unanswered questions which leaves no room for misinterpretation or misunderstanding and removes the need for solicitors and property managers to interpret a surveyors’ report. Our Schedule of Landlord’s Requirements is a single document that is as clear to a landlord as it is the lessee, with both parties benefiting from the precise and specific content. It is also used as a direct referencing document by leaseholders and their teams throughout the works phase and it assists us as we monitor and eventually sign off the works on completion.
We have won praise from landlords, tenants and property managers and solicitors for this new approach, so if this article has raised any questions for you, give us a call and we would be happy to advise you in any way and answer any questions or queries you may have.
Contact Shaun Harris
