Licence to Alter Flashcards
Benefit of Licence for Alterations?
- Protection for LL - requires T to reinstate unit at end of lease, back to how it was originally let
- Protection for T - prevents LL from rentalising alterations/improvements at rent review
Process for completing LTA application?
- Receive T application - needs to be in writing, surveyor to check lease provisions and request undertaking
- Be aware if timings are reasonableness
- Review and consult with client
- Get third party input (Insurers) - recommend building surveyor review if outside of my technical competence
- Consider nature of works, whether rental value would be improved as result, the impact on building operations, consider getting warranty, LL to confirm if they require reinstatement at lease expiry
- Liaise with the solicitors to Document the LTA
- Prior to works PM will request and review any permits/ RAMS etc.
- Complete final inspection to ensure works were done accordingly as per agreement
Note: if T believes LL being unreasonable at any stage, can go to Court
What factors need to be considered in a LTA?
- Nature of works
- Improvements
- DDA/Equality Act 2010 compliance
- H&S
- Sustainability
- Warranties for major works
- Dilaps/reinstatement provisions
- Impact on building operations
Why is it important to handle applications properly?
To ensure the complete licence protects both parties’ interest and proceeds without unnecessary delay
Different ways that consent to make alterations can be granted?
- Automatically by lease terms (no consent required)
- Formal Licence Deed - more complete works/ major works
- Simple Letter Licence - for minor alterations i.e. repainting
What information should be provided with LTA applications?
- Scope of works
- Relevant insurances
- Acceptance of fees
- H&S Risk assessment - site specific
- Building regulation compliance (if required)
Why should inspection be carried out after completion of tenant works?
- Surveyor needs to be satisfied that works were carried out to required standards, in line with plans and specifications
- Need to check if snagging ( small imperfections remaining in a property after building work has been completed) is required
What happens if superior landlord consent is required?
- Licence may form a tripartite agreement
- Advise tenant that there is potential for increased costs and longer time to process the application
- Potential for superior landlord to withhold consent
What would happen if you discovered unlicenced works on review or assignment?
- May be able to rentalise unlicenced works → depends on precise wording of the lease
- May be able to reject assignment based on unlicenced works
- Breach of lease covenant → potential to forfeit lease
- Retrospective licence
What are reinstatement provisions?
A provision that ensures the repair of the property so that it is in the same condition, or materially equivalent condition, prior to the works taking place.
How does MEES relate to alterations and your reasoned advice?
Where tenant works will (or may) negatively affect the EPC, it is likely to be reasonable for landlords to withhold consent.
How does the Equality Act 2010 relate to alterations?
Alterations may be required to allow occupiers providing a service to fulfill the obligations placed on them by the Equality Act 2010.
If works required under legislation, different statutory regime applies
→ Cannot withhold consent irrespective of wording
→ Response given within 42 days
What H&S considerations relate to alterations?
The tenants or contractors H&S documents demonstrate that risk assessments and method statements have been produced
Safe working practices should be adhered and permits issued
→ asbestos register ( ensuring any alterations avoid disturbing asbestos )
→ Construction Regulations (2007) apply to refurbishments
Can you tell us two things which are included within the RICS guidance note on licences for alterations?
- LTA to be signed before any works are completed
- Unnecessary delay to be avoided
