If you are a tenant under a commercial lease and wish to assign your interest, underlet, charge or part with possession then you are likely to need your landlord's consent.
If your lease includes a covenant not to assign, underlet, charge or part with possession without your landlord's consent and that covenant is subject to a qualification that the consent is not to be unreasonably withheld then duties will be automatically imposed on your landlord under the Landlord and Tenant Act 1988.
The duties are to:
- give consent except where it is reasonable not to do so
- give consent within a reasonable time
- give written notice of the consent decision (with reasons for any refusal)
- pass on applications for consent to anyone whose consent is required under the terms of the lease (such as a superior landlord)
Making the Application
A key point that must be kept in mind is that the duties set out above will only arise if the application for consent is served on the correct person and at the correct address. Section 5(2) of the Landlord and Tenant Act 1988 ("the Act") states that an application is to be treated as served for the purposes of the Act if:
(a) it is served in any manner provided in the tenancy,
(b) in respect of any matter for which the tenancy ,makes no provision, served in any manner provided by Section 23 of the Landlord and Tenant Act 1927.
Many leases contain service provisions that reflect those contained within Section 196 of the Law of Property Act 1925, with some amendments, and the result is that any notice to be served on the landlord will usually have to be delivered to its registered office by registered post or by hand. Section 23 of the Landlord and Tenant Act 1927 has similar requirements. Therefore, sending a notice to the landlord's property agent or solicitor or sending it by email or ordinary post is not likely to result in a valid application being made.
If an invalid application is made then the landlord can respond if it wishes to do so, but it will not be possible to bring a claim for breach of the duties imposed by the Landlord and Tenant Act 1988 if the landlord unreasonably withholds or delays giving its consent. It may be the case that the tenant will be left with a lesser contractual claim, but such a situation should be avoided.
Fixing the Problem
If an application has been made that is invalid under the Act then the only sure way to remedy the situation is to submit a fresh application to the correct party and serve it in accordance with the provisions in the lease or Section 23 of the Landlord and Tenant Act 1927. The problem with this is that the clock will only start to run for the landlord to respond within a reasonable time from when the replacement application is served. Therefore, if you require the application to be dealt with urgently it is vital that you get it right first time. If you have any queries about the Act or submitting an application please speak with a member of our team.