The following Property guidance note provides comprehensive and up to date legal information covering:
This Practice Note discusses a tenant’s considerations when negotiating alteration provisions in a rack rent commercial lease that is a new lease for the purposes of section 1 of the Landlord and Tenant (Covenants) Act 1995 (LT(C)A 1995). It identifies key tenant concerns (both at heads of terms and during lease negotiation), suggests possible tenant amendments and considers how the alterations clause interacts with other lease provisions.
For a landlord, controlling alterations is important to protect the value of its investment. The landlord should ensure that:
it retains appropriate controls on alterations and how they are carried out
the tenant is required to reinstate any alterations that reduce the landlord’s ability to re-let the premises on determination of the lease
any alterations that adversely affect the rental value of the property are disregarded on an open market rent review
a record is maintained of all works carried out and all necessary consents to such works, and
tenant alterations will not result in any claims for nuisance or disturbance from third parties such as neighbours or other tenants in the building
At the same time, the landlord should be aware that if the alterations provisions are too restrictive a tenant may not be able to operate its business effectively from the premises and/or they could be regarded as onerous
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