Property Solicitors Ipswich – Licences for alterations and sureties

Landlords must take particular care not to release a surety under a lease when granting a tenant a licence for alterations. In Topland Portfolio No.1 Limited v Smiths News Trading Limited [2014] EWCA Civ 18, the Court of Appeal dismissed the landlord’s appeal, deciding that the surety under the lease had been released from its obligations as it was not a party to the licence document. The court reasoned that as the surety was not a party to the licence, it had, in effect, not consented to the alterations. By unintentionally releasing the surety, the landlord lost the protection of the surety under the lease, meaning that the landlord could not recover the tenant’s outstanding rent from the surety.

Therefore, when considering whether to agree a licence for alterations, landlords must be particularly careful to ensure that any surety is involved in the negotiations as early as possible and that the surety is party to the licence to alterations to evidence its consent. This should help prevent the protections provided by the surety being considered ineffectual or unintentionally released.

Toby Pound is a property solicitor at Barker Gotelee, solicitors in Suffolk

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