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Licence for Alterations- Residential Leases

Please note that the information herein is of a general nature and you should not act or refrain from acting on it without professional advice on the specific facts of your case. No liability is accepted by the author or Sykes Anderson Perry Limited in respect of this article. Taxation and property law are complex subjects and the above is a basic outline only and is intended only as a general guide. Nothing herein constitutes financial advice.

It is not unusual for tenants of long residential leases to want to make alterations to their homes to update or modernise them. Most long leases contain some restriction on the type of work that can be completed by tenants either to prohibit works completely or to require consent to be granted/obtained before they can be undertaken. This is essential for ensuring the structure and look of the building is maintained.

As a Landlord you will probably want to make sure that your property is not affected structurally and you do not receive too many complaints from other occupiers in the building, whilst still maintaining a good relationship with the tenant requesting the works.

So, what should you do if a tenant asks if they can make alterations to their property?

Granting consent:

If a tenant is coming to you before they have started works this is a good start. This means you can work with them to agree plans for their proposed works which will work within what they want to do and also give you some control to ensure there are no future structural or aesthetic issues.

Once you are contacted by a tenant it is now the stage to appoint professionals to act for you. You should engage a reputable solicitor to assist with drafting a written licence granting permission to alter the property and also a surveyor who can advise on the effect of the planned works to the building, monitor the works whilst in process (if this is necessary) and inspect the works once completed.

We recommend that a written licence is agreed rather than consent given by a letter or email. The terms of the licence will be much more detailed and specifically state the works which are agreed and will also include various other aspects; such as the tenant’s responsibility to obtain planning permission, building control consent and valid insurance. Ideally it will also include plans and photographs showing the changes to be made and the current condition of the property. Other terms can be included, for example, that the tenant cannot carry out the work during unsociable hours so as not to disturb other tenants in the building or that the tenant will arrange and pay for redecoration of communal areas after the works are completed. Your solicitor can help advise of suitable things to consider.

In general, the tenant will be responsible for the landlord’s costs for dealing with the consent.

Withholding consent:

It could be the case that you do not want the works suggested by the tenant to be completed. In that instance you should again appoint a solicitor to review the lease for you to advise on the parameters of what the tenant is allowed to do in the property. If the works are possible with consent then you may not act unreasonably to withhold or delay giving such consent. The scope of what is unreasonable can be quite complex and this is why you should seek legal advice before you issue a refusal to the tenant as they may be able to challenge your decision.

You should also be aware that if the lease contains a clause which prohibits the work that the tenant wishes to complete you may not be able to provide consent. If you did so then you would be in breach of your covenant to enforce the lease covenants at the request of other tenants in the block of flats. Landlords are not free to licence works in breach of, or to waive compliance with, an absolute covenant without breaching covenants given to the other leaseholders in the building which would require you to uphold the conditions in a lease. This would be especially important if other tenants in the building object to the proposed works.

Retrospective Consent or Breach of Condition:

There may be a situation where a tenant has completed works without landlord consent. This is could be in breach of the tenant covenants contained in their lease. If you become aware of this situation should seek legal advice to the remedies that you have available.

In most instances you can agree with the tenant to provide retrospective consent to the works. As long as you do not object and your appointed surveyor sees no issues with the works completed then a licence can be agreed based on the works already completed. Again, this would usually be at the tenant’s cost.

If you are not approached by the tenant or not satisfied with the works completed by the tenant you could have various other options available which could include enforcing that the tenant returns the property to its original condition, an injunction to prevent works being completed or forfeiture of the lease. If you think you will need to take such action you should not demand or accept any ground rent or service charges from the tenant as you may inadvertently waive the breach in doing so. You should seek legal advice before taking any action.

Practical Considerations:

In all circumstances you should always ensure the buildings insurance for the building is not affected by the works proposed by the tenant and you should inform the insurer of the works be completed.

You may consider asking the tenant for a deposit before works are completed to be used should damage be caused to the communal areas or other parts of the building.

You should also consider informing the other tenants in the building of the upcoming works to make sure they know these are due to take place, especially if they could be disruptive to them. You may be asked to liaise between tenants if any damage occurs to other properties during the course of works.

For further advice on granting a licence for alterations please contact Gemma Wright, Director in the property department or for disputes relating to a tenant’s breach of covenant please contact Patricia Wollington, Senior Associate in the litigation department.

October 2018
Sykes Anderson Perry