UK Landlord Forum / Life

I am the owner of a Ground Floor Studio Flat which is one of three in an end of terrace conversion. I, and the other two Lessees, have recently purchased the Freehold and we are in the process of extending our leases from 89 years to 999 years. The owner of the top flat wishes to extend into the loft space, which is currently part of the freehold. Consequently, the loft space will need to be formally demised to their lease. 
The top floor flat is the only unit in the building with access to the loft which makes it impossible for the basement and the ground floor flats to use it practically. Whilst I have no objections to this in principle, I'm just curious to establish if the other two Freeholders are entitled to any compensation? The three owners have overseen the management of the property since acquiring the freehold and have a good working relationship, which I do not wish to sour.
I would be grateful for any advice.

Don't understand-do you all jointly own and have responsibility for the loft space? If so,I would assume you have to sign over your rights to it,and you would in theory surely have a right to some recompense.If it becomes part of his lease alone,this could also mean he has to pay for all roof repairs to that section? The good relationship you currently have cannot be guaranteed long term if ownerships change.Best to get things sorted now.

Thank you for your reply. The freehold is jointly owned by the three Leaseholders. The Loft space is currently part of the Freehold and isn't part of any individual lease. Do you know how any compensation would be calculated?

Sorry no,but if the other person feels the same way maybe get together with a suggestion.I am surprised the upper flat owner has not been advised by the solicitor that he may have to give something in return,then again,perhaps he has and has kept schtumm!

If understand the parties A, B and C jointly own the freehold and have jointly and severally leased a portion of the property to party A and party B and party C individually?  Can I assume you have a defined share of the Freehold (Tenants in Common) from an inheritance perspective?

That is an interesting construct.

You of course understand that creates 4 legal interests in the property each of which can be dealt with independently.
So party C can still own thir share of the freehold but sell their lease to party D or indeed both leasehold and freehold share.
Thereby you should consider that your convivial co-habiting relationship between A, B and C can come to an end and so will potentially any goodwill.

It is absolutely 100% certain the freeholders are entitled to compensation from the lease of the roof space.
I would think you unsound of mind to not seek some compensation.

There is of course no magic formula to calculate compensation but one way would be to consider what lease would you consider appropriate for a loft space (hence 2 bed?) flat.  Then discuss the level of investment party C is required to make that room.  Take one form the other - sprinkle in some reasonableness and then go from there. 
This is likely to turn into a 2 v 1 issue but that is always the case when commercial interests are not 100% aligned.

I'd be interested to hear how this turns out.

I assume the legal folks have ironed out how the building repair costs, insurance etc are apportioned?.  As that will be super important as you move forward if the leases are sold and especially if one has a materially larger flat now.  If you all own equal shares of the freehold and costs are apportioned on the freehold basis - does that marry up with the utility of the building? etc

Note planning permission may be required and if I were party C I would put in seek a conditions precedent to any payment that planning permission is granted...there are quite a few things to consider on this one....e.g will a massive dormer extension on the roof reduce the value of the building/your lease?

Best of luck