Beyond the Future in Real Estate

Once upon a time the grant of a lease of a commercial space was a predictable affair. A tenant required a space in which her employees would work for her benefit and the landlord owned the ideal space to accommodate the tenant. The landlord and the tenant would agree terms, a lease would be negotiated and the tenant would happily move in. The tenant may, sometimes, in addition have altered the premises to match her business requirements – no complications at all.

Modernity has quietly subverted this cosy status quo. The working environment now demands flexible working areas, super-fast broadband, “quiet areas” and even room for printers to manufacture 3D images and designs! Therefore, hardware and telecoms providers now form a crucial part of the tenant’s decision-making team in terms of equipment and timescales. A landlord is less likely to be renting a traditional workspace for working, but a hub or a “creative space”.

The landlord and tenant deal formally with alterations to premises by way of a licence for alterations, as a normal lease will provide that the premises cannot be altered. A licence for alterations gives consent from the landlord to alterations to premises which will be detailed in plans and specifications attached to the licence. At the end of the term of a lease the licence will, normally, require that the tenant place the premises back into their original condition prior to any alterations.

It is worthwhile for the tenant at the outset of any transaction to arrange plans, specifications and costings for any alterations. In addition a tenant should involve service providers on timescales. A downside of a licence for alteration is that the tenant must approach the landlord for consent in respect of any further alterations, and there will be a cost incurred by the tenant every time she makes such an approach. There may be a temptation to agree alterations with tenants without a formal licence to save costs. This can have consequences for both parties at the end of the term, in terms of uncertainty more than anything else.

As for the future, the commercial real estate world will only become more flexible and more technologically “futuristic”. Landlords will provide pre-designed “hubs” for tenants without the need for further alteration. I would ask the fast moving world of commercial real estate to let us, as the commercial property team at Geoffrey Leaver, show that we can also provide fast-moving and relevant solutions to such issues.

For more information or to discuss how we can assist you please e-mail Darren Millis or call us 01908 692769 using reference code CP001