11 August 2016

Asset Management Q&A

Asset Management Q&A: Business Tenants' Structural or Major Improvements, Jonathan Ross answers your questions.

Q:     Can a business tenant carry out structural or major improvements without landlord's consent?

A:    Yes, if the works are improvements that are reasonable and suitable and add to the letting value of the premises.

Under Part I of the Landlord and Tenant Act 1927, a tenant can serve 3 months' notice to undertake improvements, regardless of whether their lease prohibits such works or the landlord won't consent to them.

Unless the landlord can reasonably object to the improvements, the tenant can proceed with them and seek compensation for them at lease expiry. Alternatively, the landlord can elect to carry out these works itself and then recover the cost through rentalising these improvements.

In leases for a term of more than 40 years with over 25 years expired, a tenant can also seek to modify or discharge any restriction on the use of the premises.

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