A recent case may raise alarm bells for anyone thinking about adding a basement to a property which is divided.

It involved a terraced house which was converted into two flats. The top two floors of the property were owned by the freeholder. The owner of the long lease of the ground floor flat, which also had a small cellar beneath it, wished to deepen the basement so it could be turned into habitable rooms.

Planning permission was obtained for the conversion, but the freeholder opposed the development on the ground that the lease of the ground floor flat did not include the subsoil beneath the cellar.

The argument led to an analysis of what exactly had been transferred when the freeholder sold the bottom flat. There was no question at all that the freeholder owned the subsoil before the transfer – but had it been transferred or retained?

The High Court decided that ownership of the subsoil had not transferred. The relevant document had reserved rights for the tenant for the ground floor, the cellars and the foundations, and, in common with the freeholder, for services running under the property, but it referred only to ‘the building’, with no express wording regarding the subsoil under it.

In practice, it is likely that the solution will now involve the payment to the freeholder of an additional sum should the owner of the ground floor flat wish to continue with the development.

Source: Residential Property News (PC)