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Tenants Improvements

The expression Tenant's Improvements is used to describe a wide range of works, that are usually carried out by a tenant, at their own cost, and usually require the proprietor's prior approval.

Tenant's improvements may not necessarily increase the value of the demised premises, but can have an impact upon the future rent payable by a tenant. The Proprietor & Tenant Agreement provides that a covenant in a lease against the making of improvements, without the consent of the proprietor, is deemed to be subject to a proviso that consent will not be unreasonably withheld.

As a condition of consent however, the proprietor will often require: The payment of a reasonable sum in respect of any damage to or diminution in the value of the premises or of any neighboring premises also in the proprietor's ownership.· The payment of the proprietor's legal and other proper expenses incurred in connection with the granting of consent, usually by way of a Licence.·

In cases where the improvement does not add to the value of the demised premises, a covenant from the tenant to re-instate at the end of the lease.

Most rent review clauses will include a provision whereby Tenant's Improvements are ignored for the purposes of assessing the revised rental value.