The needs of any business will change as the years go by, and that may require giving premises’ a new feel, look, shape or size.
If you have a retail outlet, your offering may have evolved or even diversified, or you may have an industrial unit that needs to accommodate more equipment or advancing technology.
But, be warned, if you go headlong into alterations without taking the necessary steps, you could come unstuck and even face losing your lease.
Tenants of business premises will usually require a landlord-approved licence granting permission before making changes. You should get your solicitor to check the terms of your lease to determine whether this is required, as sometimes non-structural alterations don’t need consent under the lease terms.
If a licence is needed, it will be drafted by the landlord’s legal representative and stipulate any requirements that must be met by the tenant and the conditions of the consent. For example, it will often outline the tenant’s need to fund necessary planning permissions, any deadlines, the work quality, that the tenant is liable for any damage to the premises or its surroundings, and that it is their responsibility to reinstate any alterations when the lease ends. It may also include permission for the landlord to inspect the premises once the work is completed and whilst it is carried out.
For businesses moving into new premises where internal reworkings are required, such a licence will often be approved and agreed at the same time as the lease is secured.
When negotiating any licence, the tenant should always include a term stipulating that if the alterations increase the rental value of the premises, the increase will be ignored on rent review. Otherwise the tenant will have paid for alterations and could then find themselves paying twice when the rent goes up!
In any event, please be warned that a failure to obtain such licence (if required) or a failure to comply with any of the terms within it, could well give your landlord a right to terminate your lease.