Licences Relating To Leases
When you have a lease of a commercial premises you will, from time to time, need to apply to your landlord for specific permissions to do something. Here are some of the most common licences you are likely to encounter:
Licence to assign a lease
This is a formal document where the landlord gives permission for the tenant (referred to the licence deed as the Assignor), in occupation under a lease, to assign (transfer) their lease to a new incoming tenant (referred to as the Assignee).
To assess the precise terms and conditions on which a landlord will give its permission, it is necessary to check the terms of your lease. Not all leases contain the same assignment provisions, so it is important that we check exactly what your lease says so we can advise you what your obligations and responsibilities will be a) during the assignment process itself and b) going forward once the lease has been assigned. You need to be aware that you may have a continuing obligation to the landlord even though you have assigned your lease.
For example, you may have to guarantee the performance by the Assignee of all the tenant covenants that are set out in the lease. That means if the incoming tenant fails to pay the annual rent and other payments (e.g., insurance rent and service charges) then the landlord can require you to make those payments.
It is important that you make appropriate checks on the incoming tenant to be as sure as you can be that they will be able to comply with their obligations under the lease.
We can help and advise you with all that you need to know.
Licence To Carry Out Alterations
This is a formal document where the landlord gives permission for the tenant to carry our certain works (e.g., to make specific structural modifications or alterations or additions) to the business premises.
Once again, the important first step is to see what the lease says about carrying out alterations. Many leases contain an absolute prohibition preventing a tenant from carrying out any structural alterations. But some leases do allow tenants to carry out minor non-structural alterations (e.g., to remove demountable partitioning) without the landlord’s formal consent.
The licence document will set out the requirements that the tenant must follow and adhere to and conditions that the tenant must comply with to ensure the landlord’s interests are protected. For example, the licence will likely require the tenant to comply with all relevant laws, regulations and permits related to the proposed alterations. This may involve obtaining planning permission and/or building regulation approval or complying with health and safety requirements.
It may also outline the information that the tenant needs to provide, such as plans, drawings and specifications of the proposed alterations.
The licence may stipulate that the tenant is to be responsible for restoring the property to its original condition and configuration at the end of the lease term or at the termination of the tenancy. This may include removing any alterations or reinstating the premises to its previous state.
We can advise and guide you through all the legal requirements.
Licence To Change Use
Sometimes a tenant may want to assign its lease or sublet its premises to an incoming tenant who wants to carry on a business that is not currently permitted by the headlease. In these circumstances, the landlord’s formal consent may be needed to permit a different use of the premises.
Such a consent may require a planning permission to be obtained to allow the premises to be used under a different use class and for the landlord to be provided with a copy of the planning decision evidencing the authorised change of use.
A formal licence to change use can be a stand-alone document (e.g., where the tenant himself wants to carry on a different business at the premises) or incorporated as part of the licence to assign or licence to sublet.
We can advise and assist you if this situation arises and we have colleagues who are specialist planning lawyers who can guide you through the planning process and assist you with a change of use application to the local authority.
Please call us today on
01263 800089 or
07940 585939 or email us at
enquiries@ccclaw.co.uk to discuss your requirements
DISCLAIMER: The information and opinions expressed in this article does not address individual requirements and is for informational purposes only. It does not constitute any form of legal advice and should not be relied on or treated as a substitute for specific advice relevant to your particular circumstances.