Category A vs B Fit-Out and the Licence for Alterations
Category A (Cat A) is the landlord's base build: raised floor, suspended ceiling, HVAC distribution, core WCs, primary electrical supply. Category B (Cat B) is the tenant's occupational fit-out: partitions, meeting rooms, reception, kitchen, bespoke lighting, furniture. Shell-and-core: landlord delivers only the structural shell; the tenant carries out even more extensive works. Lease alterations covenant: absolute prohibition (valid, no reasonableness test for structural works); qualified covenant (s.19(2) LTA 1927, reasonableness implied; no LTA 1988 statutory procedure for alterations, unlike assignment); internal non-structural alterations often absolutely permitted or notification only. Licence for alterations: must be a deed executed before works start (retrospective consent does not cure the breach); append the approved drawings (works outside those drawings are outside the consent); conditions precedent (statutory consents before start; contractor approval; RAMS review; CDM notifications); inspection rights; structural engineer's certificate on completion; Health and Safety File delivery on completion. Building Safety Act 2022 (HRBs): for higher-risk buildings (18m+ or 7+ storeys; 2+ residential units), major fit-out works may require notification to the Building Safety Regulator.
CDM 2015 and Reinstatement Obligations
CDM 2015: tenant is typically the CDM client for a Cat B fit-out; responsible for appointing Principal Designer (pre-construction health and safety coordination) and Principal Contractor (construction phase safety); F10 HSE notification where the project exceeds 30 working days with more than 20 workers simultaneously or 500 person days; Health and Safety File (O&M information, as-built drawings, test certificates) delivered to landlord on completion. Where the landlord is commissioning any concurrent works, the landlord has its own CDM client duties. Reinstatement: without an express provision in the licence, the tenant has no obligation to remove alterations beyond the general yielding-up covenant; specify in the licence which elements must be reinstated (mezzanines, server rooms, raised floors) and which can be retained; require reinstatement programme in the final year of the term; approve before tenant commences reinstatement; failure to reinstate per the licence is an additional dilapidations head, separately quantified; the s.18 LTA 1927 diminution-in-value cap on dilapidations may not limit reinstatement of alterations claims. Fit-out guide: append a landlord's fit-out guide to the lease specifying Cat B standards, sustainable materials, reinstatement requirements, and BIM data delivery, reduces licence negotiation friction for each set of works.