Last edited 07 Sep 2016

Licence to alter

It is often necessary for leaseholders to alter premises they occupy, either before they first move in, or because of a need to refurbish the premises or change their operations.

Depending on the conditions of the lease and the nature of the alterations it is likely that a licence to alter will be required from the landlord giving the leaseholder permission to carry out the alterations.

Typically, works that require a licence might include altering; the structure, building services, internal walls or doors, external windows and so on. Minor changes that might be permitted without the permission of the landlord could include; putting up shelves, redecorating, laying new carpets and so on. Alterations to leasehold premises are a common cause of dispute, and if there is any doubt about whether works require a licence to alter, the landlord should be consulted. Failure to obtain permission could constitute a serious breach of the lease.

Obtaining permission can be time consuming, particularly if it coincides with agreeing the lease itself, and this can present the leaseholder with the difficulty of having to appointing designers and even contractors at risk to carry out works that might not in the end be permitted. It is important therefore that the landlord should be consulted as soon as possible to determine; whether a licence is necessary, the likelihood of permission being granted, the timescale for obtaining a licence and the form of application required.

An application for a licence to alter might include:

The Landlord and Tenant Acts require that permission is not unreasonably withheld, and in some situations, alterations which are necessary to comply with statutory requirements, cannot be withheld.

The licence itself records the agreed changes and the conditions under which those changes must be carried out:

  • The agreed works.
  • The conditions for the works (such as working hours, noise nuisance, cleanliness and waste handling).
  • Requirement to comply with statutory obligations.
  • Insurance requirements.
  • Allocation of costs. Costs incurred by the landlord in having proposals assessed and preparing the licence to alter may be chargeable to the leaseholder as may additional insurance premiums and work that the landlord wishes to carry out themselves, for example work to security and alarm systems.
  • The provision of as-built drawings and specifications.
  • Requirement to reinstate the works at the end of the lease (see dilapidations for more information).

The timing of works associated with a licence to alter can be complicated, particularly when they are associated with the initial move into the premises, and a need to synchronise this with:

  • The agreement of the lease.
  • Relocation and removals.
  • Purchase of new equipment, furniture, fixtures and fittings.
  • Reinstatement works to the premises that are being vacated.
  • Termination of the lease for the premises that are being vacated.

Failure to synchronise these activities can result in significant additional costs, or the need for temporary accommodation.

The landlord may wish to inspect the works at commencement, during the construction period and on completion.

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