Tenants’ Improvements – Landlords Beware

Tenants’ Improvements – Landlords Beware

Many landlords seek to prevent tenants from altering the property by including provisions in the lease which prohibit alterations without their consent. However, landlords may not have as much protection as they might think. Alterations that are “improvements” are subject to special rules that override what is said in the lease.

“Improvements” are works which add value or increase the usefulness of the property. Notably, that is determined from the view point of the tenant.

Landlord and Tenant Act 1927

The key rights for the tenant under the Landlord and Tenant Act 1927 are:

  • If the landlord’s consent is required for improvements, that consent cannot be unreasonably withheld. It can be difficult to assess when consent may be reasonably withheld as consent cannot be refused for financial loss alone;
  • The tenant may be able to oblige the landlord to let it carry out the improvement works even if there is an absolute prohibition in the lease; and
  • If the improvements increase the value of the property, the tenant may be able to claim statutory compensation at the end of the term for improvements that it has carried out.

As a result of these rules landlords need to be aware that they may not have as much control as they may think over the works that their tenants can carry out. They should take specialist advice on the terms of any new leases they grant, to ensure that they retain as much control as possible.

For further advice on this issue please contact Stephanie Bishop or Lindsay Holland in our Commercial Property department


 

 

 

 

About the Author: Stephanie Bishop

  • Stephanie is an Associate Director in the Property Team
  • She qualified as a Solicitor in January 1999. Since joining Owen White in 2005 Stephanie has specialised in residential and mixed-use development, having previously worked in both residential conveyancing and commercial property fields
  • As part of the Property Team, Stephanie advises national housebuilders and other regional developers.  She also acts for smaller niche developers and land owners who wish to sell property to developers for residential development
  • Her client list includes London Square Developments, McCarthy & Stone, Barratt, David Wilson Homes and Heathrow Airport
  • In addition, Stephanie assists the Commercial Property Team acting for both landlords and tenants

Stephanie’s development work includes complex mixed-use developments, site acquisitions, options, bulk sale of affordable housing plots, Section 106 Agreements and joint venture arrangements. Her commercial property work involves advising on and dealing with the grant and assignment of both occupational leases and institutional long leases

Stephanie’s specialist areas:

  •     Commercial Property
  •     Residential Development

Contact Stephanie: stephanie.bishop@owenwhite.com

 

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