Shop Development – Always Contact the Landlord

When faced with increased competition many retailers choose to look at developing and modernising their own stores. Shop development will often involve detailed planning and a number of different professionals such as shop fitters and architects. Plans will be drawn up and quotes supplied until the business owner considers he is in possession of all of the facts that will allow him to proceed.

Where a freehold property is involved, proceeding with the project will not require any permission other than possibly planning and building regulations. With a leasehold premises however, there is always a requirement written into the lease that requires the tenant obtain the permission of the landlord when carrying out any alterations to the property and depending upon who the landlord is, obtaining this can sometimes be protracted and may incur additional costs for the tenant.

The UK has a wonderfully eclectic mixture of commercial landlords ranging from private individuals up to huge corporate bodies. The relationships they have with their tenants can often be considered to be conducted on a friendly and relaxed basis and this works very well in most cases. The corporate landlords will always want to follow a more formal route via a document called a licence for alteration which is normally produced by the landlord’s solicitor. This formalises consent and protects both parties in the event of any problems with the store development itself. The landlord may want further information before giving permission to proceed and will sometimes ask for a structural survey where even minor building alterations are being carried out. The tenant will always be expected to pay for any additional information that the landlord requires. Other landlords may favour a more informal approach but always take professional advice before proceeding.

One other very important reason for contacting the landlord and obtaining permission for works to be carried out is looking ahead to a time when the business maybe sold. Any prospective purchaser will want to confirm that any formal requirements of the lease of the lease have been carried out the licence for alteration is critical in giving that comfort. If landlord’s permission hasn’t been obtained to the satisfaction of the purchaser, they may decide to pull out of any sale.

The key message here is that speaking to your landlord should be an important part of the planning process in developing your shop. If approached in the right way at the right time, most landlords will see store development as a very good thing that will benefit their tenant’s business and therefore their own investment provided the work is done correctly and safely. As I mentioned earlier all leases will contain a requirement to obtain the landlords permission for work to be carried out but it will also say that “such permission should not be unreasonably withheld”. If you are reasonable with your landlord then it generally follows that they should be reasonable with you.