Everything you need to know about a Licence to Alter

November 29, 2023

Kirkby Diamond were instructed by SEGRO - one of the UK’s largest and leading owners, managers and developers of modern warehouses and industrial property, to provide them with professional advice in connection with tenant alterations to a number of their properties across the UK.

What exactly is a Licence to Alter?

A licence to alter is official written permission from the landlord to change or improve a property that is held on a leasehold basis. If your tenant intends to renovate, extend, or develop a leasehold property then you might need them to enter into a 'licence to alter'.

Licences to Alter provide the opportunity for tenants to adapt a building to suit their own operational requirements. They serve as formal agreements between the landlord and tenant, permitting tenants to make changes or improvements to leased properties to better meet their operational needs.

The Licence also provides documented evidence of an alteration to the property which can be relied upon at the lease expiry.

Kirkby Diamond were instructed, on behalf of SEGRO to undertake a desktop document review, advise SEGRO in respect of both parties lease obligation in respect of a licence; inspect the works in advance of commencement and then ensure that once complete, the works aligned with the licence documentation.

What type of alterations might you be asked to agree in a Licence to Alter?

Some examples of works that may require a Licence to Alter include material and structural alterations such as:

  • Moving, removing or adding internal walls
  • Moving doorways or creating a new doorway
  • Structural alterations
  • Installing or replacing windows
  • Moving or installing additional toilet facilities, enabling works for tenant plant or machinery
  • Installing or changing heating systems, EV charging points or other
  • Changing the flooring type.
  • A building extension

In addition to reviewing the tenant’s alterations, Kirkby Diamond also undertook a lease review to understand and advise on the requirements that SEGRO as landlord should be requesting as part of any licence.  We were able to present SEGRO with a schedule of documentation that could track the collation of information.

In advance of the licence being agreed we were able to inspect the property and discuss the proposed works and manage expectations with regards to the information that would be expected for inclusion in the licence.

We discussed with our client the requirements within the lease and how some information is required to be included within the licence.  However other pieces of information would be provided after the works had completed. In addition, further information was necessary to be provided under the lease terms, but not necessarily included within the licence. We were able to advise that there was a clear differentiation and co-ordinate this flow of information.

Clearly understanding the lease and the requirements of the tenant in this scenario enabled our surveyors to provide advice to SEGRO to ensure that the process of agreeing the Licence to Alter was not protracted or delayed.

Upon completion of the tenant’s works our surveyors were able to inspect and confirm whether any updated As Built drawings were required. We also collated and reviewed the subsidiary documentation required under the lease terms.

The main benefit of our technical due diligence review was to ensure that our client and the documentation they held was clear and aimed to avoid ambiguity regarding any future reinstatement obligations.

If you have any questions or require any advice in connection with any Licences to Alter then please do not hesitate to contact one of our Building Surveying team who can discuss any specific matters with you - 01908 678 800

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