Most commercial property leases state that tenants may not assign or underlet lease agreements without written consent from the landlord. However Section 19 of the Landlord and Tennant Act 1927 states that landlords must not withhold consent unreasonably.
Some commercial leases go even further, stating that such consent must not be unreasonably withheld or delayed, thus ensuring that landlords respond to any such applications in a reasonable timeframe.
- Does the lease set out the circumstances whereby consent can be withheld?
- Does the lease set out the conditions subject to which consent can be granted?
- What are the likely consequences of refusal on the tenant?
- What are the likely consequences of the assignment on the landlord?
- What facts are known to the landlord to support his/her decision?
- Are the grounds by which the landlord is seeking to withhold consent reasonable?
- Do the grounds by which the landlord us seeking to use to withhold consent relate only to the lease, the tenant or the proposed assignee?
But just what is a reasonable timeframe for landlords to consider and inform tenants as to their decisions? If an application is straight-forward this could be as little as two weeks (possibly even less) from the time all relevant information has been supplied.
Landlord’s Checklist – Points to Consider
- Deal with the application as soon as it is received.
- Consider whether any further information is required and if so, request this from the Tenant as soon as possible
- If the Tenant has set a deadline, consider whether the Tenant has given good reasons. If you believe this deadline is unreasonable then set this out to the Tenant explaining why.
- Even if it is your decision to refuse consent, explain this to the Tenant using the notice provisions as set out in the Lease.