Are you considering alterations to your property?

Are you considering alterations to your property? Discover how a Licence for Alterations can safeguard your interests, whether you’re a landlord or a tenant.

James Batey, Head of Building Surveying at AG, delves into the benefits of this approach from both perspectives. Why settle for the basic lease terms when you can ensure a smooth and legal alteration process? Explore the reasons for embracing a Licence for Alterations and learn how it can be the key to a hassle-free property transformation, ensuring that alterations are conducted smoothly and legally.

From a Landlord’s Perspective…

1. Quality is priority

While leases may permit certain alterations, a Licence for Alterations offers a formal agreement that clearly defines the scope of work, duration and reinstatement provisions. This approach promotes a more structured process. Landlords should also consider how alterations impact energy efficiency and compliance with the Minimum Energy Efficiency Standards (MEES) and agreeing a licence grants the opportunity to prevent negatively effecting a building’s EPC rating.

1. There are risks in Lease Reliance – appoint a surveyor!

Differentiating between lease permissions and those requiring a licence is crucial. Some leases include a clause prohibiting alterations, making any unapproved changes a breach of lease. Over time, tenant liability may diminish under the Liability Act despite those being unauthorised alterations at the outset (older than 12 years). A retrospective Licence for Alterations can safeguard the landlord’s position and ensuring a licence holds a requirement to reinstate at expiry ensures the breach is at expiry and not during the term. Additionally, appointing a surveyor to monitor alterations can uncover other unauthorised works around the premises.

1. Agreeing Terms

Negotiating a licence allows landlords to establish specific reinstatement terms independent of lease requirements. This is especially relevant if lease terms are unfavourable or if there’s a change in ownership and the former landlord was less diligent.

1. Gain Greater Protection

Reinstatement provisions may be compromised when granting a new lease if prior alterations are inadequately referenced. A separate Licence for Alterations can protect against this by clearly outlining specific works, regardless of whether they predate the current lease.

1. What about the BSA?

The introduction of the Building Safety Act makes maintaining and recording information more critical. A Licence for Alterations facilitates better documentation of the building’s history, especially when elements are concealed or significantly altered.

From a Tenant’s Perspective…

1. Protect yourself

A Licence for Alterations grants tenants permission for adaption of the landlord’s building, which they may feel strongly opposed to. Unauthorised alterations risk the landlord demanding their removal through legal action, which can be costly and time-consuming. A Licence is the tenant’s best protection against a Landlord altering their position at a later date.

1. Want to ensure a project is kept on track?

Following the specifications and timelines agreed in the Licence for Alterations enhances a project’s success regarding statutory compliance, quality of workmanship and programme, as they will be monitored by both parties.

1. Reassure the Landlord – it might work in your favour

Requesting a Licence for Alterations demonstrates the tenant’s diligence, reassuring the landlord that the tenant considers all stakeholders, fostering a better working relationship and potentially leading to more favourable rents and other benefits.

1. Early engagement = Reduced Costs at Lease Expiry

Engaging the landlord early can reveal that some alterations benefit the landlord, who might then contribute to improvements or agree to retain them at lease expiry, reducing dilapidations costs.

1. Agree the Terms of Reinstatement

By involving the landlord, tenants can negotiate the reinstatement terms of the permitted works, including specific notice periods that allow adequate time for reinstating the required works at expiry.

Formal agreement of alterations via a Licence for Alterations reduces financial risk, encourages statutory compliance and assists in maintaining Landlord and Tenant relationships. At AG Built Environment Consultancy, we’re committed to guiding our clients through these processes with expertise and care. Need support? Get in touch for down-to-earth and commercially aware advice.

Let’s talk.