A new Protocol for Applications for Consent to Assign or Sublet has been drafted to apply to commercial property in England and Wales.
The protocol deals with the process of applying for landlord consents where the Landlord and Tenant Act 1988 (The Act) applies. The Act applies where a tenancy includes a covenant on the part of the tenant not to assign, underlet, charge or part with the possession of leased premises or any part of them without the consent of the landlord or some other person, such consent not to be unreasonably withheld. The Act imposes duties on landlords concerning when and how they should respond to applications.
The protocol is aimed at improving communication between landlord and tenants and establishing a workable timetable for the application process, avoiding arguments as to the timing and content of any information and documentation forming part of applications and guiding parties towards alternative dispute resolution (ADR) should disputes arise. It is intended to be incorporated into leases and other binding documents and sets out what it considers to be best practice for both the landlord and tenant when making or responding to applications for consent. It could also be used as a reference in legal proceedings to evaluate whether the other side's behaviour is reasonable.
The protocol is limited in scope to taking parties up to the stage of the landlord's response to a tenant's application, or a tenant's response to a request for further information. It does not comment on what if any steps should be taken should an application be ignored or consent be refused save as to say that the parties should consider using some form of ADR before referring the matter to Court as a last resort.
While some may say this makes the protocol of limited use in practice, this must be right given that come the stage of a potential dispute, each case will need to be treated according to its own facts and next steps advised accordingly. For example, if a tenant considers its landlord has unreasonably withheld or refused consent to an assignment, it has the option of proceeding with the assignment without getting any formal consent or applying to court for a declaration that no further formal consent is needed. In these circumstances ADR is perhaps not a suitable option, and may not even need to be considered if the landlord is willing to concede the point. The introduction to the protocol says it is aimed at legal and surveying professions so the chances are that the end users will be advised and aware of all the options but there is perhaps a risk that someone who is not advised will read it and think they must proceed to ADR.
In addition, while it is outside the scope of this article to comment on the forms of suggested in the protocol ADR (arbitration, expert determination or mediation) the parties should consider whether any/all of these methods would in fact be quicker and/or more cost effective than litigation. They all require co-operation from both parties to engage in and agree the particular process to be used, to include who bears the cost of that process. It therefore raises the question of whether the spirit of the protocol in encouraging a prompt dialogue between the parties in making and responding to an application will extend to resolving a dispute should it arise.
Notwithstanding these concerns, the authors' efforts should be lauded for not only making landlords and tenants aware of their statutory duties but attempting to streamline the process and reduce the need for litigation. If it is followed, the boxes for the Act should be ticked even if the parties do not know the letter of the law, which in itself should reduce the number of cases ending up in court.
The full protocol can be found here:
This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.