The terms ‘landlord and ‘tenant’ are often used for the purposes of discussing long leases in this context, and simply refer to the freeholder and owner of the premises which is being discussed. It is often assumed that the tenant does not hold a share in the freehold and therefore is not entitled to demand a licence for alterations other than by the terms set out in their lease.
What is a licence for alterations?
A licence for alterations is a form of written consent from the landlord permitting the tenant to carry out work on the premises that they occupy. Any kind of written consent should suffice; however, it is in everyone’s best interest to formalise the agreement in a licence for alterations deed.
What are the benefits of a licence for alterations?
The benefits of doing this include:
- All parties will have clarity with regards to the exact type and amount of work being agreed to. This could include detailed plans and/or drawings
- A time limit can be imposed to ensure that the tenant is obliged to start and complete work within a reasonable and agreed upon timescale
- The landlord’s consent would usually be conditional upon the tenant obtaining planning permission or other required consent, at their cost
- The landlord may want to make sure that any work carried out is done so safely and responsibly and should make the tenant aware that this is their responsibility
- Both parties should make clear what the insurance obligations are, and agree upon terms to cover this
It is important that the work is formally documented, as the tenant will need this for any subsequent sale of the premises
Why is a licence for alterations required?
It is often set out in modern long leases that the landlord will be responsible for the structural upkeep of the premises, and as a result the tenant is only responsible for the non-structural elements eg. plastering and floor coverings. This is not always the case, however in both situations the landlord’s consent is usually required before any alterations are made.
The terms set out in the lease are key to understanding what alterations can be made without the landlord’s consent. Often, any and all structural changes require consent from the landlord. External changes, additions or alterations to services such as gas and electric are also usually restricted. Non-structural changes will often be permitted with prior consent form the landlord, and the lease should state that the landlord’s consent should not be unreasonably withheld.
The terms and format of leases will vary, and particular attention should be paid by the tenants to ensure that all alterations are within the terms stated in the lease.
Can Landlords charge for consent?
When drafting a lease, landlords will often make provisions regarding the payment or fees for consent to alterations. If a legal professional is instructed early in the process, they can usually obtain assurance from the tenant’s solicitors or funds from the tenant to cover any legal costs. A landlord may charge an administrative fee for consenting to the arrangements on top of their legal costs, however this may not be an ‘unreasonable’ amount.
What happens if a tenant has made alterations without the landlord’s consent?
If a tenant has made alterations without the landlord’s consent, or made alterations which breach the terms of the lease, they may approach the landlord for a retrospective licence for alterations. In these situations, the landlord may charge extra administrative fees or a premium because the tenant is in a difficult situation.
What other obligations does the landlord have?
Time is essential when a tenant asks for a licence for alterations, as a delay in response from the landlord would give the tenant grounds to apply to the court if the landlord has unreasonably withheld consent.