Sometimes a tenant only thinks to look at its lease once something has gone wrong. This can be the case particularly with alterations.
A standard lease allows the tenant to occupy premises in return for rent being paid and lease conditions adhered to. However the premises remain in the landlord’s ownership and that always needs to be borne in mind. Tenants cannot always simply do as they wish, and should factor in landlord’s consent, particularly with regards to any alterations.
Leases tend to prohibit alterations to the exterior or to the structure. However non-structural and interior alterations tend to be allowed as long as landlord’s consent is obtained. That consent can be entirely in the landlord’s discretion, but more usually the landlord is obliged to act reasonably and within a reasonable timescale. Certain uncontentious alterations can sometimes proceed without any consent at all, for instance internal demountable partitions.
At the end of the lease the usual position is that the tenant needs to put the premises back into the same condition as they received it in. There are exceptions and sometimes specific alterations are part of a process whereby the parties liaise as to whether reinstatement is in fact required. If the alterations improve the property they may be better left in place.
However, if the tenant alters the premises in contravention of the lease then that is usually a breach of contract, as is leaving the premises without carrying out reinstatement (unless otherwise agreed). Substantial damages can become due, and may include rent provision for the period whilst reinstatement works are ongoing. It is therefore far better to think about what consents are necessary, having such consents properly documented and thinking ahead as to whether such works need to be reinstated at expiry of the lease. Costs to do so can be relatively modest (a licence for works tends to be a standardised document) and far less than those incurred if things go wrong.
Works are either (a) taken into account or (b) disregarded at rent review. Ideally if you have paid for works you don’t want them to add to your rent too, so again this should be carefully documented.
Watch too for related decorating obligations. The lease usually requires internal and external decorating at regular intervals, and again immediately before the lease ends. Again it is usually a breach of contract if that is not attended to at expiry, and damages may become payable.
