Without robust oversight mechanisms, occupier fit-outs can lead to inefficiencies, technical issues, and, ultimately, elevated energy use intensity (EUI). Managing the licence for alterations (LfA) process, and the subsequent energy consumption during occupation, offers landlords a way to retain visibility and influence over the energy performance of their buildings.
While landlords have a crucial role in reducing the energy use of their buildings, a large proportion of energy consumption is driven by occupiers, particularly through the initial fit-out and how they operate spaces thereafter.
How does this benefit landlords?
For landlords, an LfA provides a legal record and technical approval/oversight over any physical changes an occupier wishes to make to a property, ensuring works don’t diminish value, breach planning laws, interfere with building systems or impact buildings’ sustainability credentials. When assessing works, surveyors and engineers need to ensure that proposals align with the requirements of lease terms, regulations and building fit-out guides, and that they accord to the building’s energy reduction and decarbonisation strategy.
A common issue resulting from a lack of robust and decarbonisation-aligned LfAs is a loss of control over where energy is being used within a building. This often stems from fragmented systems between landlords and occupiers. Without visibility over how energy is being consumed across different areas or systems, effective management of a building’s performance becomes difficult.
This disconnect can lead to inefficiencies such as simultaneous heating and cooling, unmetered high-load equipment, discrepancies in set points and operational hours, and oversizing of central plant. These issues not only waste energy, but also contribute to inflated EUI figures, undermining decarbonisation efforts.
What, then, should an LfA consider?
Aligning alterations with asset strategy
Landlords should ensure occupier-led upgrades support their asset aspirations, this can include green certification, EPC improvements, EUI reduction and other ESG targets. Early engagement and technical due diligence help ensure proposed works contribute to, not detract from, those targets.
Building decarbonisation into the license itself
Modern LfAs should include green clauses that explicitly require sustainability to be considered in both design and execution. This provides landlords with a clear performance threshold and reporting requirement, helping ensure that any works support a building’s decarbonisation strategy - not undermine it.
Green fit-out guides
Integrating building decarbonisation goals and sustainability principles into a building fit-out guide sets clear targets and parameters for alterations, allowing the design team to consider these at the outset. This avoids perceived cost increases associated with the landlord’s decarbonisation requirements.
Specification of the occupier works
Landlords must balance control with flexibility by setting clear technical conditions in LfAs. This includes ensuring integration with the building management system (BMS) and making sure it is appropriately sub-metered, meets minimum technical performance requirements, and is coordinated within risers. Doing so enables energy visibility, accurate recharging, and streamlined maintenance - supporting upgrades without compromising building performance or decarbonisation goals.
Monitoring and approval of works
Once there’s been approval of the intended works at design stage, it’s critical for the landlord to maintain oversight of construction. This is particularly important during connection to the landlord’s systems and the services validation process, to ensure that design intent is delivered on-site, avoiding issues at handover or later down the line.
The alignment of LfAs and building decarbonisation strategies is not just a compliance issue - it’s a strategic opportunity. The LfA process is a critical juncture in building decarbonisation to reduce uncontrolled energy use. It enables landlords to protect their sustainability goals, maintain operational control, and reduce energy waste - all while supporting occupiers in creating functional, efficient spaces.
It’s no longer just about granting permission - it’s about shaping outcomes.
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