The landlord wants to keep your fit-out: what needs agreeing?

Topic
Leaving business premises
Reading time
3 minutes
Last reviewed
On this page
  1. Start with the actual offer
  2. Keep three decisions separate
  3. An agreement about one item does not settle everything

A proposal to keep the fit-out affects the exit plan: which work remains, what is available for sale and what the parties need to agree. Record the specific proposal before changing instructions to anyone else.

“The landlord wants everything left” is too broad. Identify the particular items or areas and ask the property adviser how the proposed arrangement should be documented.

Start with the actual offer

A fitted office, extraction installation and compressor may have different owners, histories and dependencies. The landlord may want the partitions but expect associated wiring to be treated differently. Someone else may own an item that appears to belong to the tenant.

Use the tenant and equipment-owner map before discussing a transfer. Then record the proposal at item or clearly defined area level:

  • what the landlord wants to retain;
  • who appears to own it and what evidence supports that entry;
  • its known condition and any assessment still needed;
  • what the landlord proposes about related services and making good;
  • whether any payment or other consideration is proposed;
  • which parties and advisers still need to agree.

This is an agenda for agreement, not a document transferring ownership or releasing obligations.

Keep three decisions separate

The property position. Ask whether and how the proposal changes any relevant removal, reinstatement or other lease obligation. GOV.UK's tenant guidance points to the lease when discussing repairs and moving out. Do not infer a release from a conversation about keeping an item.

The asset position. Establish who can agree to leave or transfer the item, whether it has already been included in another sale instruction and what restrictions need checking.

The future condition and responsibility. Ask the advisers what the agreement should say about the item as it stands, associated records and responsibility after the agreed handover. Avoid promises that an installation will suit a new tenant's use without proper assessment.

The alterations chronology can help identify what was added, under which records and by whom. It is particularly useful when the retained fit-out has changed over several tenancies or business owners.

An agreement about one item does not settle everything

In a fictional example, the landlord is interested in keeping an office partition system. The tenant expects that to remove the entire reinstatement issue. Yet the parties have not discussed flooring, services, signs or another altered area.

The owner's next action is to ask the advisers to define the agreement's scope. It is not to cancel all planned property work. Compare the remaining position through the works-or-settlement discussion.

Keep a fallback for items whose treatment remains unresolved. If the proposal is not agreed, the owner needs to know which decisions must be revisited and when. A provisional intention should remain visibly provisional on the closure plan.

If an asset enquiry has already gone to UK Auction Group, report the proposed change through the agreed instruction route. Say exactly which items may be retained by the landlord and which permissions remain open. Do not let a property negotiation and a sale enquiry make conflicting promises about the same installation.

More decisions are covered in Leaving business premises.

Sources

This guide is general information and education only. Legal, tax, employment and safety decisions may need a qualified adviser who knows your situation. Read the disclaimer.

Closing a business with assets to sell?

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Send a list of what you have, where it is and your deadline. Decisions that are still open can be included.

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