Commercial Tenants will need their landlord’s permission in a number of circumstances. For example:
- Consent to carry out alterations
If your lease permits you to carry out alterations then this will normally require you to obtain the landlord’s written consent first.
You will generally be required to submit details of your proposed alterations to the Landlord for approval. If the landlord approves they will issue consent in a formal document called a Licence for Alterations or Licence for Works.
This will set out details of the conditions upon which the consent is granted. For example you may be given a time frame for completing the works and you will probably have to reinstate any alterations at the end of the lease period ie put the property back how it was.
It will always be a requirement that the Tenant pays the Landlord’s costs associated with this consent, this may include surveyors costs as well as legal costs.
- Consent to Assign or Sub-let
Your lease may allow you to assign (transfer) your lease to another party or sub-let.
If you assign the lease then you are no longer the tenant under the lease and the assignee/buyer becomes the new tenant.
On a sub-letting you remain as the tenant and continue to have the same obligations to the Landlord, but also become a landlord yourself, collecting rent from the sub-tenant.
Your lease will set out the conditions that must be met in each case before the Landlord will issue consent to assignment. As a general guide the landlord must be satisfied with the financial standing of any assignee and be satisfied that they can comply with lease terms.
The Landlord can refuse consent if they are not satisfied with the financial standing of the proposed assignee or may give consent subject to conditions, for example personal guarantors may be required, a rent deposit may be required and the outgoing tenant will generally always be required to enter an Authorised Guarantee Agreement – meaning the outgoing tenant stands as guarantor to the new tenant either until the end of the contractual lease term or until the lease is assigned again.
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