Consider the law when making premises refurbishments.
by Niall McCann of thePublican.com's legal team of experts from London solicitors Joelson Wilson.
Your premises are looking stale, the bar is too small and your staff can't open the kitchen doors without whacking customers coming out of the loo. The solution to this problem is to make alterations to your premises.
However, such changes should not be carried out before due consideration is given to three areas of the law. These cover leases, planning/building regulations and licensing.
Landlord and tenant issues
Before serious consideration is given to any desired changes, it is important to look at your lease. Your lease is unlikely to make thrilling reading but you ignore the covenants contained within it at your peril. In the section called "lessee's covenants" you will usually find reference to the types of alteration that you, as a tenant, can make to your premises. Although wordings vary, such clauses generally fall into one of the following categories:
- Absolute prohibition: If your lease contains words to the effect of "the tenant shall make no alterations to the demised premises", your scope to become the next Laurence Llewelyn-Bowen could be severely limited. This clause means the landlord is under no obligation to permit changes to be made unless you can apply one of the following exceptions:
- the changes you wish to make might not fall under the definition of "alterations". For example, you may merely wish to renovate a fixture or fitting, which is likely to come under the guise of a repair rather than an alteration;
- if you are obliged to carry out the work under statute or at the request of a body such as the fire brigade, so as to comply with statutory requirements. For example, if you employ more than 15 people, under the Disability Discrimination Act 1995 you have to take reasonable steps to prevent the physical set-up of your premises being a disadvantage to disabled people. To comply with the act could mean certain changes need to be made to your premises, regardless of restrictions imposed by the lease;
- if the alterations are improvements to the premises, you are entitled to apply to court for consent to carry out the works. If you do carry out improvements you might be entitled to compensation on vacating the premises.
Should your plans not fall into any of the above exceptions, all is not lost. Provided you have a reasonable relationship with your landlord, the absolute prohibition may be waived - especially if you offer a fee to him for agreeing to your request.
- Qualified covenant: A qualified covenant clause might read "the tenant shall make no alterations without the prior written consent of the landlord". Such a clause still permits the landlord to refuse you permission to make the alterations, without even providing a reason.
Fully qualified covenant: Your lease may contain wording like "the tenant shall make no alterations without the landlord's prior written consent, such consent not to be unreasonably withheld". This wording is more positive as it ensures that the landlord cannot simply dismiss your request out of hand, as he would have to act reasonably when considering your request.
What is reasonable and what is unreasonable has been debated on numerous occasions in the courts, but the law would indicate that a landlord can justifiably refuse consent if planning consent is required, where the tenant is in breach of any covenant of the lease or if the alterations would potentially change the use class of the building.
At the risk of depressing you, a landlord can demand that you pay his legal costs incurred in providing the consent.
In addition, when consent is granted a landlord would in some cases be entitled to impose conditions, such as requiring you to reinstate at the end of the term or taking the alterations into account on rent review.
By this stage, I would expect that some of you are tempted to merely carry out alterations without wasting time and money jumping through the legal hoops. Do not be tempted. If the landlord discovers that you have breached the alteration covenant in your lease, there are a number of avenues available to him:
- Injunction: The landlord could obtain an injunction whereby a court would order you to restore the premises to their original state. Needless to say, any expense will come out of your own pocket.
- Damages: A court could order you to pay damages. These are assessed as the amount of money that the landlord would have charged should you have requested his consent.
- Forfeiture: While an extreme measure, should your lease contain such a clause you could lose your interest in the premises if alterations were carried out without consent.
Other considerations
Don't forget that in addition to obtaining consent from your landlord to the proposed alterations you will need to get approval from the magistrates. If you plan to increase drinking facilities, to conceal a drinking area from observation or alter communication (eg creating a new doorway/fire exit) then you will need prior consent from the court. If you have a public entertainment licence the council will also need to approve any revised layout.
In addition, you may need planning and building regulation approval before commencing any significant works at your site. Your architect or designer should be able to advise you about these issues at an early stage.
Pictured: Building regulation approval may be required to carry out changes.