Varying residential flat leases

Flat leases often contain defects which one party or the other would like to see changed. This can be a particular problem on resale as lenders continue to tighten their requirements over time.
 
Such a change would usually be documented by varying the lease via a Deed known as a “Variation”.

Recent case law developments have made lease variations easier in certain circumstances and serve as a useful reminder of the available routes for seeking a variation.

So – how can a flat owner or their landlord seek to make a change to the terms of an existing flat lease?

(1) Agreement and limitations

First—and perhaps most importantly—the parties can agree to make a change to the lease; the flat owner might, for example, offer to pay a premium in exchange for the variation.
 
However, the landlord may be restricted by the terms of the other flat leases when making changes. Often, there is a scheme of covenants under which the landlord has agreed, in each lease, to impose and enforce similar obligations on all flat owners in the building. This may prevent it from making the proposed change, or from granting a consent that might operate to effectively waive the covenant in question.
 
A common issue that arises is when a flat owner wants to carry out alterations that the lease prohibits in absolute terms or has already done so and is now seeking to regularise the position. In such cases, the landlord cannot consent or vary the lease to allow the works with consent without breaching its obligations to the other flat owners (or at least not without risk).
 
So, the parties need to tread carefully in this regard. It may be necessary to vary all of the leases, or to consider other potential options.

(2) Varying a single lease

Alternatively, i.e.  where agreement cannot be obtained, a flat owner or their landlord can ask the First tier Tribunal (FtT) to order certain changes.
 
One party to the long lease (one granted for 21 years or more so not a short term assured shorthold tenancy for example) of a flat can apply to the  FtT to vary the lease on the grounds that it fails to make “satisfactory provision” with regard to one or more of the following matters under s.35(2) of the Landlord and Tenant Act 1987 (LTA 1987):
 

• The repair or maintenance of the flat building or common parts;

• The building's insurance;

• Maintenance of installations that are reasonably necessary to enjoy a reasonable standard of accommodation (they do not need to be in the building);

• The provision or maintenance of any services reasonably necessary to ensure that occupiers of the flat enjoy a reasonable standard of accommodation;

• The recovery of expenditure by one party from another incurred for the other party’s benefit;

• The computation of service charge payable under the lease.

However, such relief is discretionary as opposed to being as of right, so the outcome cannot be guaranteed.

Two recent cases have made it easier to obtain such an order by clarifying what the term “satisfactory provision” means and enabling the financial circumstances of a party to be taken into account.

In the case of 56 Westbourne Terrace RTM Company Limited v Polturak [2025] flat owners had collectively obtained control of management via the right to manage (RTM) but the lease terms prevented company from recovering the costs it incurred taking enforcement action against leaseholders (relating to service charges) from them in that matter; such costs could only be recovered in connection with forfeiture proceedings, which could only be initiated by the freeholder and not the RTM company.
 
This effectively frustrated the operation of the statutory scheme of the RTM as a RTM company is a straw man with no independent financial resources; its only asset is the entitlement to obtain funds from leaseholders under the lease terms i.e. recovering its costs. It may become insolvent if it could not recover the costs of enforcement action. That in turn would prevent it from fulfilling its management responsibilities to the building.
 
The Upper Tribunal found that this was not satisfactory provision and so allowed the lease to be varied to give the RTM company the right to recover such costs (although tit didn’t manage to recover the particular costs claimed within those proceedings) – The Upper Tribunal held that the FtT had incorrectly applied a too-narrow test of whether the lease was 'clear and workable’ based on the earlier case of Camden v Morath (2019);
 
“clarity and workability cannot provide a comprehensive test for whether the provisions of a lease are satisfactory” ([70]). Instead, the ordinary dictionary definition of ‘satisfactory’ should be used – whether the provision set out by the lease is “adequate, fair, tolerable; sufficient for the needs of a given situation or circumstance”:
 
“To say that there has been a failure to make satisfactory provision for something suggests that there is a problem of some sort without giving the impression that the problem is acute. Nor does it give any indication of the nature of the problem. It may be something for which provision has been made, which turns out not to be adequate, or it may be the omission to make any provision at all for a particular contingency which is unsatisfactory” [112]
 
This point was underlined in the case ofEastern Pyramid Group Corp SA v Spire House RTM Company Limited[2025]. Here an RTM company could not obtain the funds required to commit to major works due to the lease terms; the lease only entitled it to require payments on account of next year's expenditure to the tune of up to 50% of the expenditure that had been incurred in the previous year and reserve fund contributions of 30% of the costs incurred in that previous year.

The FtT granted a variation on the basis that the lease failed to make satisfactory provision for the recovery of service charges required to meet the cost of emergency and major works in circumstances where the RTM company had no other financial assets with which to plug the gap.
 
The landlord and others appealed on the basis that, amongst other things, the FtT was wrong to regard the lease as unsatisfactory and to take into account the RTM’s financial circumstances.
 
However, the Upper Tribunal rejected their contention that the lease had to be “seriously defective” to be “unsatisfactory” and that the nature and financial position of the party responsible for maintenance was relevant in this regard:
 
“The intention of section 35 is to resolve practical problems and to ensure that maintenance gets done and is paid for; it would be perverse if the fact that the respondent is an RTM company meant that its practical difficulties were irrelevant so that it could not make use of the legislation.” [78]
 
It should be noted that this type of application cannot be made in respect of leases that include three or more flats in the same building or business leases.

Where a s.35 application is made, the other party can request that if the application succeeds then corresponding variations should be made to such of the other flat leases as they specify (s36).
 
(3) Variation of two or more leases
 
A group of leaseholders can collectively seek to vary two or more leases together on the grounds that the proposed change ‘cannot be satisfactorily achieved unless all of the leases are varied to the same effect’ (s.37 LTA 1987). This allows for changes that cannot be achieved by a single party applying to vary a single lease under s.35.

However, there are participation thresholds to this method: