Businesses looking to take on commercial leases often need to modify the existing decor or layout of the property, particularly where such companies are providing client-facing services. Landlords should consider potential tenants’ pre-planned fit-out plans or improvements before finalising leasing agreements. This article explores the key considerations surrounding licences to alter, explaining their importance and the various factors that landlords and tenants must consider.<\/p>\n\n\n\n
A licence to alter<\/a> is a document ancillary to the lease and governs the process of changing leased properties. Depending on the types of changes the tenant plans, they can take different forms, affecting their legal implications and enforceability. For minor changes, a letter of consent from the landlord may be enough to satisfy the lease requirements. <\/p>\n\n\n\n On the other hand, a more formal licence to alter will typically be sought out for more significant or structural changes and is issued as a longer-form document and executed as a deed. It is always essential to check what the lease says about how consents or approvals under the lease can be made. If the lease says that alterations<\/a> can only be \u2018approved\u2019 by deed, then the consent should be executed as a deed. <\/p>\n\n\n\n The lease will govern whether landlord consent is required for alterations, which may vary depending on the type of work. For example, installing a demountable internal partition is often permitted without seeking formal consent. <\/p>\n\n\n\n The licence to alter is used when permission is required to make specific changes to a property. It will set out the conditions under which the alterations can be made and is required before any work starts. The primary purpose of this document is to protect the interests of both the landlord and the tenant, ensuring that any changes to the property are compliant with legal requirements and carried out appropriately.<\/p>\n\n\n\n One of the most critical aspects of a licence to alter is the scope of alterations. The licence must clearly state the changes permitted. It should include detailed plans and drawings, specifications for materials, a timeline for completion, and any restrictions or limitations on the work. Precision in this area is crucial to avoid misunderstandings or disputes between the parties involved at a later stage.<\/p>\n\n\n\n Common alterations in commercial properties<\/a> often include structural changes such as displacing external or load-bearing walls, flooring modifications, windows replacement, property extensions, and relocating facilities such as those related to the provision of utilities. These changes will require the landlord\u2019s consent under the lease and can significantly affect the property’s current value or insurance requirements. <\/p>\n\n\n\n Often, tenants will take over old properties and make significant improvements, but they still need to seek consent. A tenant\u2019s modifications to fit their business needs can also impact the landlord\u2019s ability to find suitable tenants following the expiration of the lease. To mitigate this, most licences to alter (and leases) will oblige the tenant to remove the alterations and reinstate the premises ready for re-letting. <\/p>\n\n\n\n There may be provisions in the lease or licence to alter that require the tenant to carry out these works with good workmanship and using a certain quality of materials. The landlord wants to preserve the integrity of their property and limit the effect of works on its energy efficiency. <\/p>\n\n\n\n Surveyors may become involved to review the plans’ accuracy and the suitability of the tenant\u2019s planned alterations. These documents should also consider any disruption to other tenants.<\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\nUse of Licence to Alter<\/h3>\n\n\n\n
Key Points<\/h3>\n\n\n\n
Landlords\u2019 Consideration<\/h2>\n\n\n\n
Property Value and Future Marketability<\/h3>\n\n\n\n
Quality of Alterations<\/h3>\n\n\n\n