Details of works

Having an overview and an understanding of the nature and type of works required to achieve the result sought by the alterations is important and therefore the tenant should provide scope of works as well as plans and specifications for the works the tenant is proposing to undertake.

Compliance with regulations

You should consider appointing a suitably qualified surveyor who will check the plans and specifications to ensure that they comply with the relevant laws and regulations. Certain works may require planning permission such as those involving alterations to the structural elements of a building and additional compliance is required when undertaking alterations to a listed building or a building located in a conservation area. Therefore, you should require a tenant to obtain all the necessary planning permissions prior to starting the works. In fact, it is common for a modern lease to prohibit a tenant from making applications for a planning permission without first obtaining consent from the landlord.

Lease provisions

A landlord should check the relevant lease provisions relating to alterations to see whether the alterations being proposed are permitted under the lease. If the lease permits a certain type of alterations with landlord’s consent which is not to be unreasonably withheld, this means that you will be required to act reasonably when deciding whether to agree to the alterations. If however the lease prohibits alterations completely, you may still be persuaded to grant consent, but there is no obligation to act reasonably when making the decision.

Other occupiers

Consider the likely impact on other occupants of the building. For example, there may be residential tenants occupying the upper parts who may be inconvenienced by the works which means that measure will need to put in place to cause as little disruption as possible. Therefore, it may be possible to restrict the works to certain times of the day so as not to cause significant disruption to other occupants of the building and is a matter for discussion between you and the tenant.

Insurance

Another point to consider is the effect of the alterations on the landlord’s building insurance as some alterations may result in a higher insurance premium resulting in an increase to the tenant’s insurance rent. Therefore, discuss the alterations with your insurance provider to check the likely increase in the insurance premium.

Impact of the works

Check whether the alterations are temporary and so can be removed at the end of the term or whether the alterations result in a permanent change and so may not be easily removed or reinstated at the end of the lease term. Certain alterations may have an adverse impact on the value of the building and affect its future use and therefore you should evaluate the likely impact carefully.

Additional consents

If there is a superior landlord or a lender, you will need to seek their consent to the alterations. A lender or a superior landlord may also want to see the full details of the alterations.

Documenting consent to alterations

Consent to alterations is usually documented by way of a Licence for Alterations which outlines the conditions for the grant of landlord’s consent and sets out the rights and obligations of each party in respect of the alterations. The document also contains tenant’s obligations to remove the alterations at the end of the term.

Considering these factors will help you to make a more informed decision that balances your need to maintain control over your property whilst accommodating the tenant’s business needs.

For more information please contact sofia.khaliulin@haroldbenjamin.com