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The case provides a reminder of key points which tenants and their advisers need to be aware of, when making application for licence to assign or underlet: • check the terms of the lease carefully, to see what requirements the landlord may make, and whether any third party consents may be required, such as a superior landlord; • check the notice provisions in the lease, to see how notices should be served.Normally applications should be made in writing and direct to the landlord, even if this is also copied by e-mail to the landlord’s surveyors or other advisers; • provide as much information about the proposed transaction and assignee/undertenant as possible.The retail unit was subsequently sublet to a sub-tenant (for purposes of this article referred to as the “tenant”) by reference to the terms of the superior lease (the “lease”).
Decision Whilst the lease did not contain a requirement on the landlord not to unreasonably withhold consent, statutory provisions provide that a landlord owes a duty to grant consent within a reasonable time, except in circumstances where it is not reasonable to do so.
In order to trigger this duty notice must be served on a landlord by the tenant applying for consent.
Notwithstanding that no licence to assign had been completed, Gilesports completed the assignment at the end of May.
The dialogue with the landlord’s solicitors about the text of the licence to assign continued, although it was slow moving.
Amongst other things, the Court was asked to decide whether the landlord had unreasonably delayed giving its consent to the assignment.
When a tenant applies for landlord’s consent to alienation, an important piece of legislation can come to their aid.The lease in this case contained comparatively standard provisions for service of notices, requiring that any notice must be in writing and served on the party to whom it is addressed, either by hand or by registered post.Because the Gilesports’ application for consent had been made by e-mail, to the landlord’s agent, this did not satisfy the requirements for service of the application, so section 1 did not apply.Despite this, the court also considered whether the landlord in this case had in fact unreasonably delayed giving consent.Gilesports’ solicitors had never indicated that the application was an urgent one.There had been delays by Gilesports and their solicitors in dealing with the application process.The court referred to established case law, which indicates that the “reasonable period”, within which a landlord may consider an application, may be measured in weeks rather than months.In 2009 the assignee went into administration, owing a significant amount of rent arrears.The landlord sued the original tenant, Gilesports, for arrears, on the basis that no consent to the assignment had been given, so Gilesports remained liable.On the basis that no formal consent had been given so the tenant remained liable the landlord sought to recover these from the tenant.The Issues Amongst other points, the Court considered whether consent was required under the lease and, if so, had it been unreasonably withheld.