Explain what you mean by a rear terrace.If the rear terrace is in fact a balcony with a floor above.Then the balcony is within the cartilage of the property.If it is a top terrace ie it has no roof on it that is considered totally different.The first description allows you to infill it with windows and therefore it makes a separate room and is legal.If however the terrace as you call it is an open balcony,it is then considered to be an enlargement/ extension of the property and would need planning approval.Having lived next door to Dogen Kaya,the beledye chief of planning,I had no probs with this.