Extending your commercial property

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What are the potential legal issues to consider?

If your business is expanding, you may have outgrown your current premises. Before you start looking for a new site, it is worth investigating whether you could extend your existing property. Depending on the site and the nature of your building, you may be able to extend up by adding new floors, down by digging a basement or out, by expanding the footprint of the current building. As well as complying with planning and building regulations, you must consider any specific legal constraints that might affect your ability to extend.

Moving your business will cost you time and money, so it makes sense to get the best out of your existing site if there is room to grow. Issues like uncertain boundaries and neighbours’ rights of light can be traps for the unwary, so it pays to get the right legal advice at the outset.

Check what you own

Before you plan an extension, it is vital to check how much land you own and on what basis. If you own the freehold, you will generally have more flexibility about making changes. If the property is let as an investment, you must be careful not to interfere with your tenants’ use of it. Your solicitor will be able to check the terms of your tenants’ leases to see what scope you have for making alterations to any existing buildings and for causing short-term inconvenience to your tenants while works are carried out. If you have a mortgage, you may also need the lender’s consent for any alterations or additions to the property.

If your property is leasehold, you will probably need consent from your landlord for any alterations. Many leases have a complete ban on extensions and structural alterations. Your landlord may agree to your proposals, but you must get consent in the right way. Getting this wrong could mean losing your lease altogether, so you should make sure your solicitor checks the lease and approaches the landlord for consent on your behalf. If you want to extend beyond the area already covered by your lease, your landlord may be willing to grant a supplemental lease of additional space. Again, it is important to get this properly documented.

Legal constraints to look out for

Land can be affected by a range of legal issues which could impact on a planned extension. Some may be set in your title documents and others should be apparent from an inspection of the site. For example:

  • The property may be subject to restrictive covenants which prohibit or restrict further building on the site or limit the size of any buildings. You might also need the approval of another landowner for any alterations or extension. In recent years, the courts have taken a hard line on those who deliberately ignore restrictive covenants, awarding damages and in some cases ordering buildings to be taken down.
  • If your proposed extension could block or limit light to the windows of a neighbouring building, you may be able to change the design to avoid problems. If not, you may have to negotiate compensation or get your neighbours to release rights of light. This is a complex area of law and you should make sure you get specialist advice.
  • It sounds obvious but watch out for your boundaries, as they are not always clear. Land Registry title plans are usually not definitive, so if you are in any doubt, ask your solicitor to check your title documents. If you extend onto land you do not own, you will be trespassing and could face damages and possibly an injunction.
  • If you are planning to extend upwards or downwards, check whether you own the airspace above and the subsoil below the existing building. The usual rule is that ownership includes as much airspace and subsoil as necessary for the reasonable use of the land, but this may have been limited by specific exclusions when the land was sold or let in the past.
  • Others could already have rights over the area where you plan to extend. Telecoms operators may have rights to keep equipment on the roof; utility companies may have rights to run their services under parts of the site; and neighbours may have rights of way. If your extension would interfere with any of these, your solicitor will need to negotiate releases or compensation.

How we can help

A successful extension can bring huge benefits in how you use your commercial premises and could help you increase your returns. Getting a solicitor involved early on will mean you know exactly what you own already and what restrictions you may need to overcome. This will help you avoid wasting time and costs on unexpected disputes, so you can focus your efforts on putting together a scheme that really works for your business.

For further information, please contact the Commercial Property Team on 01733 882800 or email [email protected].

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