Legal Guide
What is a Licence to Alter?
A licence to alter is the freeholder's written permission for a leaseholder to carry out works that alter the flat. Most residential leases require it before any significant alterations begin. Where it was not obtained, the issue almost always surfaces when the flat is sold.
Licence to Alter in Plain English
When you own a leasehold flat, you own the right to occupy the property for the term of the lease, but the structure and common parts of the building remain the freeholder's property. Most residential leases contain a covenant (a binding contractual term) prohibiting the leaseholder from carrying out alterations without the freeholder's prior written consent. A licence to alter is that consent, set out in a formal legal document.
The licence is prepared by solicitors and executed by both parties before the works begin. It describes the works in detail, sets out any conditions (such as using approved contractors, insuring against damage during works, or giving access to the freeholder's surveyor to inspect), and records any ongoing obligations the leaseholder takes on, such as maintaining a new installation or reinstating the flat to its original condition at the end of the lease.
The requirement exists to protect the freeholder's interest in the building, to protect other leaseholders whose flats could be affected by structural or service changes, and to maintain a clear record of what has been done to the property. A flat with a full paper trail of licensed alterations is simpler to sell and value than one where the history of works is unknown.
Which Works Require a Licence to Alter
The exact scope of the alterations covenant varies from lease to lease, so checking the specific wording is always the first step. As a general guide, the following categories commonly require a licence.
Works that typically require a licence
- Removing or altering internal walls, particularly loadbearing walls. Even non-structural walls may be caught depending on how the alterations covenant is drafted.
- Installing underfloor heating, particularly wet systems that involve pipework within the floor structure.
- Making openings in external walls, including new windows, external doors, or openings for air conditioning units.
- Moving or adding soil pipes or drainage, which pass through or affect the building's communal services.
- Loft conversions or basement works where the flat includes those spaces within its demise (the area covered by the lease).
- Creating a new bathroom or wet room, or significantly relocating an existing one, particularly in an upper-floor flat where leaks could affect the flat below.
- Any works affecting the structure of the building. As the freeholder owns the structure, any alteration to it requires their consent regardless of what the alterations covenant says.
Works that typically do not require a licence
Minor internal works that do not affect the structure, external appearance, or communal services of the building are usually not caught by the alterations covenant. Redecorating throughout, replacing a kitchen or bathroom on a like-for-like basis (same location, no structural changes), replacing internal doors, and installing fitted wardrobes typically fall into this category.
Hard flooring is a common grey area. Some leases specifically require the freeholder's consent before replacing carpet with hard flooring, particularly in upper-floor flats where impact noise can be an issue for the flat below. If the lease is silent on flooring, it is worth checking whether the building's house rules or management company requirements address it.
If there is any doubt about whether a particular piece of work requires consent, write to the freeholder or managing agent asking for clarification before starting. Obtaining written confirmation that no licence is needed costs nothing and protects you if the question arises at a later sale.
Applying for a Licence to Alter and the Costs Involved
The application process starts with a written request to the freeholder or managing agent, accompanied by plans and specifications of the proposed works. For anything beyond the simplest alteration, professional drawings are usually needed at this stage. The freeholder will then review the application and, in most cases, instruct their own surveyor to assess the works.
The freeholder's surveyor
Under most residential leases, the freeholder is entitled to instruct a surveyor to review the proposed works, inspect the flat before and after completion, and confirm that the works have been carried out in accordance with the licence. The cost of the freeholder's surveyor is passed to the leaseholder as part of the licence process. For a straightforward domestic alteration, surveyor fees of a few hundred pounds are typical, though more complex projects cost more.
The licence document itself
Once the works are approved in principle, solicitors prepare the licence document. The freeholder's solicitor drafts it; the leaseholder's solicitor reviews and advises before the leaseholder signs. Both sides' legal costs are usually borne by the leaseholder, as the lease covenant that requires consent also typically requires the leaseholder to pay the freeholder's reasonable costs in granting it.
What to expect in total
For a straightforward internal alteration (removing a non-structural wall, for example, or installing underfloor heating), total costs in the range of £500 to £2,000 are common, covering the licence fee, the freeholder's surveyor, and solicitor fees on both sides. More complex projects involving structural works, specialist surveys, or a large or commercially minded freeholder can cost considerably more. These figures should be treated as indicative: actual costs vary, and it is worth asking the managing agent for a cost estimate before committing to the application process.
Timescales
The time from initial application to a signed licence depends heavily on the freeholder's responsiveness and the complexity of the works. A simple application where the freeholder is cooperative can complete in four to eight weeks. Applications involving structural works, multiple professional consultants, or a slow managing agent frequently take three to six months. Planning works well in advance and making the application before a sale is agreed is always preferable to trying to resolve it under time pressure during conveyancing.
Retrospective Consent: When Works Were Done Without a Licence
A significant proportion of leasehold flats have had some form of alteration carried out without the required licence. This is not unusual: many works were done years or decades ago by previous owners who were unaware of the requirement, or who chose to proceed without it. The gap typically comes to light during the conveyancing process on a sale, when the buyer's solicitors review the TA7 form and the LPE1 management pack.
How the issue surfaces
The TA7 leasehold information form asks sellers whether any alterations or additions have been made to the flat and, if so, whether the necessary consents were obtained. If the seller answers honestly that alterations were made but no licence was obtained, the buyer's solicitors will raise this as a requisition (a formal legal query requiring an answer before exchange). If the seller does not disclose the alterations, the risk of misrepresentation arises.
The LPE1 management pack is a further check: the managing agent may note alterations they are aware of, particularly structural works where a building warrant or planning permission was obtained and left a paper trail.
Obtaining retrospective consent
Retrospective consent is a licence to alter granted after the event. It operates in the same way as a standard licence, but the freeholder is reviewing works already completed rather than proposed ones. Many freeholders will grant retrospective consent for domestic works that have been completed to a reasonable standard and do not cause ongoing issues. The process involves the freeholder's surveyor inspecting the completed works, the licence fee being paid, and the licence document being executed.
The advantage of obtaining retrospective consent is that it gives the buyer a clean title: there is no ongoing breach, and no risk of the freeholder taking enforcement action in future. Where a sale is already under way, completing the retrospective licence process can add time, so starting it as early as possible once it becomes clear it is needed is important.
When retrospective consent is not available
Some freeholders will not grant retrospective consent, particularly where the works are of poor quality, have caused damage to communal areas, or where the freeholder's relationship with the leaseholder is difficult. In these cases, indemnity insurance is the alternative most commonly used. An indemnity policy covers the buyer (and their mortgage lender, if applicable) against the risk of the freeholder taking enforcement action, including the cost of reinstatement or legal defence.
Indemnity insurance is not appropriate in every case. Insurers will generally not provide cover where the freeholder has already been made aware of the breach and has objected, as the risk is no longer theoretical. It is also less suitable for significant structural alterations where the ongoing impact on the building is uncertain. A specialist leasehold solicitor can advise on whether insurance is a viable route and which insurers will consider the risk.
How a Licence to Alter Affects Selling Your Flat
Licences to alter, or their absence, are one of the standard areas of leasehold conveyancing that buyers' solicitors investigate on every sale. The TA7 form asks about alterations explicitly, and the LPE1 management pack may also reveal works the managing agent is aware of. Accurate disclosure at the outset is essential.
Where a licence exists
If alterations were made and a licence was obtained at the time, the position is straightforward: provide a copy of the licence to the buyer's solicitors as part of the contract pack. A properly documented and licensed alteration adds to rather than detracts from the appeal of the flat, particularly if the works improved the layout or added a bathroom.
Where no licence was obtained
The options in rough order of preference are:
- Obtain retrospective consent before marketing. This is the cleanest outcome. If the works are significant, starting the retrospective consent process well before putting the flat on the market avoids it becoming a problem mid-sale.
- Obtain retrospective consent during the sale. Where the issue only comes to light once a sale is agreed, the seller's solicitors can apply for retrospective consent in parallel with conveyancing. This requires time: rushing a freeholder rarely works.
- Use indemnity insurance. Where retrospective consent is unavailable or the works are minor, an indemnity policy may be acceptable to the buyer and their lender. The seller typically pays the one-off premium. The buyer's solicitors will advise on whether insurance is acceptable for the specific works involved.
- Price the issue in. Where resolution is complex or uncertain, some sellers agree a price reduction that reflects the risk to the buyer. Cash buyers who are experienced with leasehold complications are generally more willing to price in this kind of legal issue than owner-occupier buyers and their mortgage lenders.
Buyers' mortgage lenders
Where a buyer is purchasing with a mortgage, their lender's solicitors will also need to be satisfied that the title is acceptable. Most mainstream lenders require either a licence or acceptable indemnity insurance for any structural alterations that were carried out without consent. For minor non-structural works, lenders are generally more relaxed, though requirements vary. A buyer unable to mortgage a flat with unlicensed structural alterations may need to withdraw, even if they personally are comfortable with the risk.
Related Reading
The legal hub covers the wider legal side of selling a leasehold flat. The TA7 guide explains the leasehold information form where alterations must be disclosed on every sale.
Frequently Asked Questions
A licence to alter is the freeholder's formal written permission for a leaseholder to carry out works that alter or improve the flat. Most residential leases include a covenant (a binding contractual term) that prohibits alterations without the freeholder's prior written consent. The licence is that consent: it sets out which works are permitted, any conditions, and the leaseholder's ongoing obligations. It is prepared by solicitors and signed by both parties before the works begin.
Works that commonly require a licence include: removing or altering internal walls (particularly loadbearing ones); installing underfloor heating systems; making openings in external walls; moving or adding soil pipes or drainage; loft conversions or basement works within the flat's demise; and creating or significantly relocating a bathroom. Any works that affect the structure of the building always require the freeholder's consent, as the freeholder owns the structure. The precise requirement depends on the individual lease wording, so checking the alterations covenant before starting any works is always advisable.
Minor internal works that do not affect the structure, external appearance, or communal services of the building are generally not caught by the alterations covenant. Redecorating throughout, replacing a kitchen or bathroom on a like-for-like basis, replacing internal doors, and installing fitted furniture typically fall into this category. Hard flooring is a common grey area: some leases specifically require consent before replacing carpet with hard flooring in upper-floor flats. If in doubt, write to the freeholder or managing agent before starting work and keep their written response on file.
It depends on the lease. Where the alterations covenant is absolute (the lease prohibits alterations without consent, with no qualification), the freeholder can refuse on any grounds. Where the covenant is qualified (consent is required, but shall not be unreasonably withheld), the freeholder cannot refuse unreasonably. Most modern residential leases use qualified covenants. A freeholder who refuses unreasonably under a qualified covenant can be challenged. In practice, the great majority of licences for reasonable domestic works are granted, subject to conditions and the payment of fees.
The leaseholder typically pays the licence fee charged by the freeholder, the freeholder's surveyor fees, and the freeholder's solicitor fees for preparing the licence document, plus their own solicitor's fees for reviewing it. For a straightforward domestic alteration, total costs in the range of £500 to £2,000 are common, though more complex projects or less cooperative managing agents can push this higher. These are indicative figures; asking the managing agent for a cost estimate before applying is sensible.
Carrying out works without the required consent is a breach of the alterations covenant in the lease. The freeholder's options include requiring reinstatement at the leaseholder's cost, seeking a court injunction, or in serious cases pursuing forfeiture proceedings. In practice, most freeholders prefer to grant retrospective consent for reasonable completed works rather than pursue enforcement, in exchange for the standard fee and costs. Where a freeholder refuses retrospective consent, indemnity insurance is the usual alternative for resolving the issue in the context of a sale.
Retrospective consent is a licence to alter granted after the works have already been completed. Many freeholders will grant it for domestic alterations of reasonable quality that do not cause ongoing problems for the building. The process is similar to a standard licence application: the freeholder's surveyor inspects the completed works, the fee and professional costs are paid, and the licence is executed. Where a freeholder refuses, indemnity insurance is the alternative, provided the freeholder has not already been notified of the breach and objected.
Yes, but the issue must be disclosed in the TA7 form and addressed before or during conveyancing. The preferred route is retrospective consent from the freeholder. Where that is not available, indemnity insurance is the standard alternative for minor works; it covers the buyer against enforcement risk and is often acceptable to mortgage lenders for non-structural alterations. For significant structural works where neither route is available, the issue will need to be priced into the sale. Cash buyers are generally more flexible in accepting this type of legal complication than buyers relying on a mortgage.