Commercial property · 6 min read · 23 October 2026

Licence to alter: when you need one, when the landlord can say no, and what it costs

A licence to alter is the landlord's written consent to works the lease does not let the tenant carry out on its own. Whether you need one, and whether the landlord can refuse, depends on how the alterations covenant is worded. Where consent cannot be unreasonably withheld, the landlord needs a reason connected with its property interests, and in January 2026 the High Court held an outright refusal unreasonable where the landlord's concerns could have been met by conditions in the licence. What the tenant does not get, for alterations, is the statutory timetable that applies to assignments.

First, read the covenant

Alterations covenants come in three forms, and the form decides everything.

• Absolute. No alterations at all. Section 19(2) of the Landlord and Tenant Act 1927 applies only to a covenant against improvements "without a licence or consent", so it does not soften an outright prohibition.
• Qualified. No alterations without consent. For works that are improvements, section 19(2) adds a proviso that consent is not to be unreasonably withheld, whatever the lease says.
• Fully qualified. The lease itself says consent is not to be unreasonably withheld.

Many leases split the works: structural and external alterations prohibited, internal non structural works allowed with consent, and some partitioning allowed with no consent at all. The licence you need is the one the clause requires for the works you actually plan.

When the landlord can refuse

Where consent cannot be unreasonably withheld, the courts apply the principles set out by the Court of Appeal in Iqbal v Thakrar [2004] EWCA Civ 592 at paragraph 26, restated by the High Court in Great Jackson Street Estates Ltd v Manchester City Council [2026] EWHC 740 (Ch) at paragraph 101. In summary:

• The covenant exists to protect the landlord from alterations that damage its property interests, and consent cannot be refused on grounds that have nothing to do with them.
• Consent cannot be refused on grounds of financial loss alone; the proper course is to ask for a compensatory payment.
• The landlord does not have to prove its conclusions were justified, only that a reasonable landlord might reach them.
• It is for the tenant to show the refusal was unreasonable, which means making the proposals clear enough for the landlord to decide.

The 2026 case is a warning to landlords. The tenant wanted to demolish two derelict warehouses and the landlord refused outright. The court held the refusal unreasonable, because concerns about a half completed demolition and the state of the cleared site should have been met by conditions in a licence, not a refusal (paragraphs 118 to 122). A refusal because the tenant had not offered an unconditional costs undertaking also failed, where the tenant had offered one capped at £2,000 plus VAT and the landlord had made no counter proposal (paragraph 132). As the judge put it, the case shows "the dangers to a landlord of a blanket refusal, rather than consent in principle, but subject to appropriate conditions" (paragraph 140).

No statutory clock for alterations

Tenants often assume the landlord must answer within a reasonable time. That duty comes from section 1 of the Landlord and Tenant Act 1988, and it applies only to covenants against assigning, underletting, charging or parting with possession (section 1(1)(a)). It does not cover alterations. For a licence to alter there is no statutory duty to decide within a reasonable time, no statutory duty to give written reasons, no statutory shift of the burden of proof onto the landlord of the kind section 1(6) makes for assignments, and no claim for breach of statutory duty under section 4.

The case law adds two further points. The tenant carries the burden of showing the refusal was unreasonable (Iqbal v Thakrar, principle 3), and the landlord may rely on reasons that actually influenced it at the time even if it did not tell the tenant (Great Jackson Street, paragraph 105).

The practical answer is a complete application: drawings, specification, method statement, programme, contractor details and an offer to meet the landlord's reasonable costs, so the landlord has nothing left to ask for.

Who pays

For improvements, section 19(2) allows the landlord to require, as a condition of consent, a reasonable sum for any damage to or diminution in the value of the premises or neighbouring premises it owns, and its legal and other expenses properly incurred. Where the improvement does not add to the letting value, it may also require, where reasonable, an undertaking to reinstate the premises. Most licences also deal with insurance, statutory consents, the standard of the works and reinstatement at the end of the term.

Planning permission and building regulations approval are separate from the landlord's consent. A licence to alter does not give them.

Retrospective licences

Works carried out without a required consent are a breach of covenant, however sensible they are. For this kind of breach, forfeiture needs a notice under section 146(1) of the Law of Property Act 1925 first, and the landlord can also claim damages. A retrospective licence records consent after the event and usually carries conditions: the landlord's costs, a surveyor's inspection, any remedial works and reinstatement at the end of the lease.

One point cuts in the tenant's favour. A landlord who knows of the breach and then does an unequivocal act recognising the lease as continuing, such as demanding or accepting rent, can waive the right to forfeit for it (R Square Properties Ltd v Reach Learning Ltd [2017] EWHC 2947 (Ch)). That is a reason for a landlord to take advice before the next rent demand, and for a tenant to apply before the works start.

The deed

A licence to alter is usually completed as a deed. We negotiate it to agreed form. Execution of the deed and any Land Registry step go to an instructed authorised solicitor, and we do not act on the grant or assignment of a lease for a premium.