There seems to be a fairly wide-spread view that asking a Landlord for consent to assign a lease can be dealt with quite informally, perhaps by a quick e-mail. However, tenants who want to take advantage of the assistance the law provides will need to take their application more seriously.
Assuming there is no absolute prohibition on assigning a lease (in which case you truly are at the mercy of the landlord no matter how perfect the application) Section 19 of the Landlord and Tenant Act 1927 and the Landlord and Tenant Act 1988 are powerful weapons for all tenants seeking to assign. Section 19 implies into any lease that prohibits assignment without the landlord’s consent a term that consent cannot be unreasonably withheld, but it is the 1988 Act which gives this provision real teeth. The 1988 Act radically changed the previous law because it requires consent or refusal with reasons to be given within a reasonable time. What is a reasonable time will depend on the particular facts of each case, but in Go West Ltd v Spigarlo the Court stated that, even in complicated cases, the decision should be given in weeks rather than months.
If a landlord fails to give consent within a reasonable time then the tenant can bring a claim against a landlord for damages. The tenant can also bring a claim for damages if the landlord has refused consent without giving reasons or has refused consent unreasonably. All good news for tenants so far, but what is often overlooked is that this weapon can only be used once a formal application for consent has been made. In short the tenant needs to ensure that the following steps have been taken:-
- The application is made in writing and is served on the landlord in accordance with the service provisions in the lease. The application does not have to be in a particular form (unless required by the lease), but it must identify the proposed assignee and be unequivocal. An informal exchange of letters or e-mails, no matter how lengthy the exchange, will not be good enough.
- There is no requirement to provide any specific information with the application (unless required by the lease). However, if the application does not include all the information that a landlord might reasonably require to make its decision then it can stop the clock by requesting that the information be supplied. The request must be reasonable and a landlord will be employing a dangerous tactic if it requests mountains of unnecessary information in an effort to delay. A good guide for tenants is to supply sufficient information with the application, typically references from the proposed tenant’s bank, professional advisors and previous landlord, along with audited or management accounts going back 3 years.
The tenant can further increase pressure on the landlord by stating that the application is urgent or requesting that it be dealt with within a particular timeframe.
It is often overlooked how useful these statutory provisions can be but, even if the landlord and the tenant are on good terms, the application should be made formally at the outset to protect the tenant’s position.
If you would like to discuss to discuss the implications of an application for consent with landlords or tenants in more detail, please contact Michael Clark, OTB Eveling’s specialist property litigator.