Freeholder Rights: Can They Change the Terms of a Lease Agreement?

Can a Lease Be Changed by the Freeholder in the UK?

In the UK, leases are legally binding contracts between leaseholders (also known as tenants) and freeholders (landlords). These contracts outline the terms and conditions under which a property is leased, including rights, responsibilities, and obligations. Once a lease is signed, it cannot usually be changed without the agreement of both parties. However, there are certain situations where a freeholder may seek to change a lease. Here's what you need to know about whether a lease can be changed, under what circumstances, and what rights you have as a leaseholder.

Can a Freeholder Change a Lease?

In most cases, a freeholder cannot unilaterally change a lease. Leases are set for the entire term of the leasehold agreement (often 99 years, 125 years, or more), and the terms of the lease are binding unless both parties agree to make changes. This means the freeholder needs the leaseholder’s consent to modify the lease.

Key points include:

• Mutual Agreement: Any change to a lease requires the consent of both parties—the freeholder and the leaseholder. This might involve negotiating terms and formally documenting the changes in a deed of variation.

• Deed of Variation: Changes to the lease terms are typically made through a legal document called a deed of variation. This document must be signed by both the leaseholder and freeholder, outlining the specific changes being agreed upon, such as amending service charges, extending the lease, or altering restrictions.

• Legal and Administrative Costs: Lease modifications typically come with legal and administrative fees, which both parties may have to share or agree upon. In many cases, the leaseholder may be responsible for covering these costs.

When Can a Freeholder Change a Lease?

While a freeholder cannot change a lease unilaterally, there are specific situations where they may seek to make changes, including:

1. Service Charges and Maintenance Obligations:

   • Freeholders may seek to update or change the terms relating to service charges or the responsibilities for property maintenance and repairs. For example, they might want to adjust the method by which service charges are calculated or add clauses for newly required repairs.
   • Leaseholders must be consulted before any significant changes to service charges or maintenance obligations are made.

2. Modernising the Lease:

   • In some cases, freeholders may request changes to "modernise" the lease if it contains outdated or unclear language. This could include updating clauses related to subletting, shared areas, or property use.

3. Extending the Lease:

   • If the lease is approaching expiry (e.g., below 80 years), leaseholders may choose to extend the lease, often involving a renegotiation of the terms and costs with the freeholder. This is usually done through formal channels under lease extension law.

4. Enforcing Lease Terms:

   • If there are breaches of the lease terms by the leaseholder (e.g., unauthorised alterations to the property), the freeholder may seek to enforce the lease or make amendments as part of a resolution.

Can a Freeholder Enforce Changes to a Lease Without Consent?

A freeholder cannot force changes to the lease without the leaseholder’s consent. However, in some situations, freeholders may take action to amend or challenge the lease terms through legal channels if they believe it is necessary, for example:

1. Tribunal Applications:

   • If there is a disagreement about proposed changes to the lease, either party (freeholder or leaseholder) may apply to a First-tier Tribunal (Property Chamber) to resolve the dispute. This tribunal has the authority to make decisions about certain aspects of the lease, including service charge disputes, lease extensions, or variations.

2. Variations for Multiple Leaseholders:

   • Under certain circumstances, if the freeholder wants to change a lease that affects multiple properties within a development or building (e.g., changes to communal areas or shared maintenance), they may apply to the First-tier Tribunal for permission to vary the lease. This is known as a “mandatory variation” and can be applied in cases where:
     • The lease does not make adequate provision for repairs or maintenance of the property.
     • The lease is defective in how it handles costs for shared services or common areas.
     • Certain essential terms are missing or unclear.

   In these cases, the tribunal may approve the variation, but it is still a legal process that typically involves consultation with affected leaseholders.

3. Service Charge Modifications:

   • Freeholders cannot unilaterally increase service charges or add new service-related obligations unless these are already allowed in the lease. However, freeholders may apply to a tribunal to adjust or clarify service charges if there is a dispute.

What Should a Leaseholder Do if the Freeholder Wants to Change the Lease?

If your freeholder approaches you with a request to change the lease, here’s what you should consider:

1. Review the Proposal:

   • Carefully review the changes being proposed and understand how they will affect your rights, obligations, and financial responsibilities as a leaseholder. You may want to consult with a property solicitor to ensure you fully understand the legal implications.

2. Negotiate Terms:

   • If the changes are reasonable and beneficial (e.g., modernising the lease or extending the lease term), you can negotiate the terms and costs with the freeholder. Make sure the agreement is documented through a deed of variation.

3. Seek Legal Advice:

   • If you are unsure or disagree with the proposed changes, seek legal advice from a specialist in leasehold property law. They can guide you on how to respond, negotiate, or challenge the freeholder’s request.

4. Tribunal Application:

   • If you and the freeholder cannot come to an agreement, either party can apply to the First-tier Tribunal for a resolution. The tribunal will review the case and make a binding decision on whether the changes should be enforced or rejected.

5. Consider Costs:

   • Be aware that modifying a lease typically involves legal and administrative fees. Make sure you clarify who will be responsible for these costs—whether it’s shared between you and the freeholder, or if one party takes on the full expense.

How Fraser Bond Can Assist

At Fraser Bond, we offer expert advice and support for leaseholders and freeholders navigating lease modifications. Our services include:

• Lease Reviews: We help leaseholders understand the terms of their lease and any proposed changes, ensuring you are fully informed before agreeing to modifications.

• Deed of Variation Support: Our team can guide you through the process of creating or reviewing a deed of variation, ensuring any lease changes are fair and legally compliant.

• Legal Representation in Tribunal: If disputes arise and tribunal applications are necessary, we provide legal representation and advice to help you achieve a positive outcome.

• Lease Extension Services: If you’re considering extending your lease, we assist with negotiating the best terms and navigating the legal process with your freeholder.

Conclusion

A freeholder cannot change a lease unilaterally without the leaseholder’s agreement, but there are certain circumstances where lease modifications may be necessary or beneficial. Whether it’s modernising outdated terms, extending the lease, or addressing service charge issues, any changes must be made with both parties’ consent or through legal channels like a tribunal.

If you’re facing a request to change your lease or need advice on leasehold issues, contact Fraser Bond for professional guidance and support. We’re here to help protect your interests and ensure a fair outcome.