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I live in a flat in a London house. There are two other flats, so that's 3 flats with 3 leaseholders. Our old leases, which were renewed in 1992, state:

Alterations: 3.9 Not to make any structural alterations to any part of the Flat nor to alter the appearance of the exterior of the Building

As I understand it, this is an Absolute Covenant. There is a solicitor's document (from 1992) that accompanies the lease explaining the terms. It states:

You are not permitted to make any structural alterations to the property or structural additions to the property without first obtaining the landlord’s consent in writing.

This interpretation is clearly not an Absolute Covenant, and my understanding for this disparity is that these old leases commonly have these overly restrictive clauses which over the years were re-interpreted by landlords. So by 1992 it was customary to act along the lines of what the solicitor wrote.

However, we have since had Duval v 11-13 Randolph Crescent Limited 2020 which determined that Absolute Covenants are precisely that, and any specified forbidden acts remain forbidden.

Have I understood this correctly?

We will wish to make alterations some day, but want a situation where all parties must be in agreement. Would renewing the lease and simply removing the restrictive old clause and substituting the solicitor's one (from 1992) fix the problem?

This may seem obvious (it does to me) but no one seems to be able to agree. Even the solicitors currently involved. I'm hoping someone can throw some light on this?

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Note that in the Duval case the landlord was prevented form approving the alterations only because there was also a provision in the leases of other tenants providing that any of them could require the landlord to enforce the agreements.

In paragraph 41 of the judgement it is said that:

Dr Duval accepts that, absent clause 3.19, the landlord and lessee would be free to agree a waiver of an absolute covenant or a licence to carry out a piece of work that would otherwise amount to a breach of its terms, but contends that in this case and as a result of the inclusion of clause 3.19 in each of the leases, any such waiver is precluded unless all of the other lessees agree to waive their rights. Put another way, by undertaking to enforce the covenants of the lease, the landlord has undertaken not to do the opposite, namely to license breaches of covenant. She argues that, were it otherwise, clause 3.19 would be ineffective.

And this contention was eventually upheld. In paragraph 59 (the final paragraph) the court wrote:

... By contrast, clause 2.7 is directed to more fundamental works which go beyond routine alterations and improvements and are intrinsically such that they may be damaging to or destructive of the building. These are the kinds of work which it is entirely reasonable to suppose should not be carried out without the consent of all of the other lessees.

In short, the landlord could have approved the work, even in the face of an absolute covenant, butr for the presence of the further covenant with other tenants to enforce the absolute covenant . Even then, the work can be done provided that all of the tenants approve.

It would seem from this judgement that substituting the lawyer's statement "without consent of the landlord" for the older absolute form would permit such changes to be made if the landlord consents, and such consent apparently may not be unreasonably withheld. However, under the older absolute form, the consent of the other tenants might also be required, if there is a provision similar to clause 3.19 in the Duval case by which the landlord promises enforcement to other tenants.

In the absence of a conflicting contract with others, a landlord and tenant can agree to modify a lease or tenancy agreement in any lawful way. In the Duval case there was such a conflicting contract.

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  • Thank you so much David. A very comprehensive answer. So, if I understand this correctly, we could just leave the leases as they are (we have difficulties agreeing on any changes) and any works that future freeholders may want to pursue wouldn't be a problem as long as all parties agreed? I should mention, if it's not clear already, that there's no external landlord involved. The three freeholders are jointly the landlord. "The plural shall become the singular" as the lease says. (I love that phrase.) BTW Thank You also to the admin who tidied up my original post. ;-)
    – KarelB
    Aug 4 '21 at 8:18

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