Whether it’s a complete refurbishment of a retail store, an upgrade to HVAC equipment in an industrial unit or the installation of some partitioning in an office, if you’re a tenant looking to carry out alterations to your leasehold premises, there are some key steps to take.
- Don’t just start the works! To avoid potential legal issues arising, there are various things you need to consider before starting work.
- Review your lease: You need to check the alterations provisions for any restrictions around the type of work you can carry out and for any requirement for landlord’s consent to be obtained to the particular alterations you have in mind. It’s naturally more common to see stricter controls over structural and external alterations. You may also wish to discuss the proposals with your landlord in principle before moving forward so as to understand, early on, any concerns they may have.
- Prepare detailed specifications: Clearly outline the scope of your proposed changes, including architectural plans, design concepts, and materials as appropriate. You should provide sufficient information as a package to enable the landlord to properly consider the application as a whole, but they may have further queries.
- Seek landlord’s consent where necessary: Where consent is required under the lease, you need to contact your landlord with full details of your proposed works, formally requesting that consent be given. We can help with applications of this nature.
- Consider the environmental impact: Sustainability requirements, such as obligations to use sustainable materials, and clauses relating to energy performance are becoming a common feature in leases, particularly in light of a landlord’s increased obligations under the MEES Regulations which came into play last year. There will often be a complete bar on carrying out works which would impact on the energy rating or negate an existing Energy Performance Certificate, so the Landlord will want comfort that this point has been considered.
- Comply with regulations: Make sure that your alterations comply with local planning, building, and safety regulations. Permissions, permits or licences may need to be obtained, and you should check the lease terms again to ensure you comply with any requirements around seeking and implementing these. For example, landlord’s consent may be required for the submission of planning applications.
- Consider practical matters: Consider whether you need access to adjoining property in order to carry out the works or to transport materials to site, and whether you benefit from appropriate rights to do so. Think also about the impact of your works on neighbours and give them appropriate notice.
- Financial planning: Understand the financial implications and properly budget to cover both the cost of carrying out the works, and of all necessary consents and requirements detailed above. The terms of most leases allow the landlord to recover their proper and reasonable costs in respect of any application for consent, so expect to cover legal fees, the level of which will very depending on the complexity of the works.
- Check insurance cover: Don’t forget to ensure that any contractors you instruct carry appropriate levels of cover (for example, the landlord may insist on a specific figure). The buildings insurance provider ought also be informed (this is often done via the landlord) and any requirements they may have need to be complied with so as to avoid invalidating that policy.
- Instruct us to help with documentation of formal consent: Consent will generally be given by way of a licence to alter, executed as a deed, which will detail the consent, obligations governing the way in which the works are to be carried out, how any impact on rent is to be dealt with at rent review, and provisions relating to removal and reinstatement of the property at term expiry.
If you have any queries regarding leasehold premises alterations or for further information please contact our Real Estate team.