Fitting out your space: A practical guide for charity tenants

Whether you're fitting out a new shop, refreshing a tired office, or rebranding your space mid-lease, alterations are one of the areas where charity tenants most commonly run into difficulty. The good news is that most issues are entirely avoidable with the right advice and a clear understanding of your lease. Start with reviewing the lease terms

If you are planning to undertake alterations and are unsure what is permitted under your lease, it is important to review your lease to understand what is permitted, with or without landlord's consent, and what are the things you cannot do.

• Permitted alterations without consent
  The lease may permit alterations without requiring the consent of the landlord. This is often minor, non-structural alterations such as demountable partitioning, movable shelving or installing fixtures which do not affect the property's structure.  
  
  A tenant may still be required to notify the landlord of the alterations and provide details (such as plans or specifications) even where the landlord's consent to the works is not required. The landlord may also require plans of the property following completion of the works.
• Permitted alterations requiring landlord's consent
  Where the landlord's consent to alterations is required, this should be documented in writing, usually by way of a formal Licence for Alterations. If the landlord's consent is required this should be obtained and documented before the works are undertaken, this can take some time and should be factored into the project timeline. 
  
  If the proposed alterations are to be undertaken at the beginning of the lease the Licence for Alterations can be negotiated and agreed alongside the lease. 
  
  Most commercial leases will provide that landlords cannot unreasonably withhold their consent. Whether the landlord has reasonable grounds to refuse to grant consent will depend on the particular facts and circumstances of each application for consent.
• Alterations which aren't expressly permitted or which you can't do
  The lease may prevent some or all types of alterations to the property. Structural and external alterations which impact the value of the property tend to not be allowed. Undertaking any alterations in such circumstances would be a breach of the lease. 
  
  A commercial agreement may be reached between the landlord and the tenant to allow alterations where they are not permitted under the lease however, the landlord will be under no obligation to permit such alterations. In such circumstances it is key to seek legal advice and properly document the variation to the lease terms and consent to the specific alterations.

Getting landlord's consent

Where the landlord's consent is required, this should be obtained before any work is undertaken.

You may be required to submit detailed plans and specifications of the proposed changes to the landlord for approval.  Your solicitor can support you in ascertaining the documentation which needs to be provided to the landlord under the lease terms. Your surveyor or contractor can assist you in collating the documentation and preparing any specifications or plans which may be required. It is also likely that the landlord will ask the tenant to pay for their legal fees in providing their consent and so this cost may need to be factored into the cost of the charity's project.

Licence for Alterations

It is very important to document the landlord's consent in writing before starting any work. The Licence for Alterations will document the landlord's consent to the works and set out the terms under which the consent is granted. Any plans or specifications submitted to the landlord in the course of obtaining their consent may be appended to the Licence for Alterations.

The Licence for Alterations may also include obligations on the tenant to ensure that the alterations are carried out to a professional standard, in compliance with planning and building regulations and include indemnities to protect the landlord from any liabilities arising from the alterations.

The Licence for Alterations will usually address any obligations on the tenant to restore the property to its original condition at the end of the lease by removing any alterations made, or an express agreement between the parties for the alterations to remain at the end of the lease term. This should be factored into the decision making when planning the alterations, for instance the shop fit out, as the landlord can ask for all alterations to be removed at the end of the lease term. 

How we can help

Navigating lease terms and landlord negotiations can feel daunting, but you don't have to do it alone. We can help you review your lease, advise on what consent you need, and manage the Licence for Alterations process from start to finish, so you can focus on getting your space ready.

If you would like to talk through your plans, please contact Lily Langlois or Emily Rickett in our Commercial Property team.