Tenant alterations to commercial premises

By Sarah Secker

The key considerations for a tenant who wants to make alterations to its commercial premises are as follows: 

Landlord’s consent: Most leases will require the landlord’s consent before any alterations may be made to commercial premises and this consent must usually be documented in a licence for alterations.

Structural or non-structural: Structural alterations are usually prohibited.  Non-structural alterations are generally permitted with the landlord’s consent, which cannot be unreasonably withheld or delayed.  Sometimes the installation of internal partitioning is permitted without landlord’s consent.

Signage: The landlord’s consent will usually be required for the tenant’s external signage.

Timing: A licence for alterations may be required for the tenant’s initial fit-out works.  The tenant will need permission to be granted at the same time as taking its lease so it may commence fitting out straight away.  Alternatively, the need for a licence for alterations may arise during the term of a lease.

Plans and specifications: The tenant must ensure that full plans and specifications for the proposed works are provided so that the landlord has sufficient information to decide whether or not to grant consent.

Building Regulations and/or planning permission: The tenant must consider whether it will also need to apply for Building Regulations approval and/or planning permission for its works.

Reinstatement: Most leases will require the tenant to reinstate the premises to its original condition by the end of the lease term and to make good any damage caused to the premises by the reinstatement.

Rent Review: A tenant needs to be careful to ensure that its alterations are disregarded in any rent review as they may increase the rental value of the premises.

Licence for alterations: This will usually specify a deadline by which the works must commence and a deadline by which they must be completed.  The licence may permit the landlord and its surveyor to inspect the works. 

Cost: Most leases provide that the tenant must pay the landlord’s solicitor’s and surveyor’s costs in connection with a licence for alterations.  Sometimes the landlord may be prepared to bear the tenant’s costs if the tenant is also taking the grant of a new lease.

Please note these are general principles and each lease should be individually checked.  Contact Sarah Secker at the Commercial Property Department at Sampson Coward on 01722 410664 for more information and advice.

Sarah Secker