When you’re living in a leasehold property, making changes often requires permission from the landlord. Wondering about the ins and outs of this process? You’re in the right place. This page is your go-to guide for all things related to a Licence to Alter. We’ll cover when you might need one and break down the process for you in a way that’s easy to understand.
What is a licence to alter?
A Licence to Alter (sometimes called a Licence for Alterations) is a legal document a leaseholder needs to get in order to make major alterations to their leasehold property (such as a house or flat).
It spells out when and how alterations can be carried out, making sure both leaseholder and freeholder are aware of the changes and avoiding potential disputes.
Why do you need a Licence to Alter?
A Licence to Alter is often necessary because most leases contain restrictions on alterations. In some leases any changes to the property are strictly forbidden. While with others, a freeholder may have to get the freeholder’s permission before they can carry out any alterations.
The reason these conditions exist in a lease is because while a leaseholder owns the property for the duration of the lease, the freeholder still has an interest in that property and they’re likely to want to know when any significant changes are carried out to make sure they don’t impact the properties value.
When do you need a Licence to Alter?
When a Licence to Alter is required depends on the terms of the lease and the type of changes a leaseholder wants to make to a property.
Generally, commercial leases say one of three things:
Alterations are a straight up no. A leaseholder can ask, but if the landlord says no, it’s a hard no;
Alterations aren’t allowed unless the landlord agrees;
Alterations aren’t allowed unless the landlord agrees but they must have a legitimate reason for withholding consent.
A Licence to Alter isn’t generally needed for minor improvements like painting a hallway or renovating kitchens and bathrooms, provided work doesn’t affect the structure of exterior of the building.
However, if you’re a leaseholder with dreams of extending a property or recladding it, it’s likely you’ll need consent from the freeholder to undertake this.
A word of caution, however: Always check the terms of the lease before carrying out any renovations. Terms can vary and interpretation of them might be subjective. For example, you might believe installing an aerial on the roof of your property is perfectly reasonable, only to get a nasty shock when it turns out this is forbidden under the terms of the lease.
Possible consequences of carrying out alterations without a Licence to Alter
If a leaseholder carries out alterations without getting a Licence to Alter they are in breach of the lease agreement and the freeholder may have grounds to take legal action which could result in the leaseholder having to return the property back to its original condition, which could be costly. In extreme cases, a breach of the terms of the lease could result in the leaseholder forfeiting the lease.
Alongside this, renovations made without proper authorisation can potentially impact the property’s value, making it less attractive to potential buyers. This can be especially true for buyers who are familiar with leases and their terms, who might be hesitant to buy a property which has unauthorised alterations because it can be difficult to secure a mortgage.
With all the above in mind, it’s very important to get a Licence to Alter before making alterations to a leasehold property in order to avoid headaches down the line. We know, we know, it might seem like a pain. But there’s a good reason you should do it, and a good property solicitor can help make the process smooth sailing.
