The reasonableness of refusing permission for an assignment or underletting has been tested in the courts on numerous occasions. By contrast, cases on the reasonableness of refusing a tenant’s application for permission to make alterations have been relatively low. Consequently, Eaton Mansions (
The tenant had had air-conditioning equipment on the roof of a building in multiple occupation since 1980. Only some of the equipment had been installed with the landlord’s consent. However, the landlord had not protest against those placed without his consent.
In 2008, the tenant replaced the existing installations with newer, smaller and more efficient equipment. It did not obtain consent before doing so, although it knew that consent was required from: (i) the landlord, to avoid a trespass; and (ii) the freeholder because the installation might be regarded as a breach of the covenants in the headlease (which banned alterations to the external appearance of the building). The landlord issued proceedings for an order requiring the tenant to remove the equipment without formally applying for the freeholder’s consent.
The landlord accepted that it may have represented that it would not unreasonably withhold consent for apparatus of reasonable size and quality in a reasonable position. Consequently, the tenant argued that: (i) the only reasons for the landlord’s refusal that were relevant to whether it was reasonable were those present in the landlord’s mind when it required the removal of the apparatus; and (ii) the landlord’s refusal to permit the apparatus would have been justified only if, at the time when consent was refused, the landlord had reasonably understood that the freeholder had refused to approve the equipment.
Had the underlease entitled the tenant to place equipment on the roof with the landlord’s consent, the Court of Appeal accepted that it might have been appropriate to proceed by analogy with the developed law in respect of tenants’ covenants not to make alterations without consent. However, it would be inappropriate and unjust to determine the position between the landlord and tenant in the same way that it would have done in such circumstances (especially since neither party had analysed the application in that way).
It was pertinent to look at the evidence more widely and the landlord had been entitled to be cautious. The freeholder had stated clearly in informal discussions that it might refuse permission for various reasons – in particular because the equipment was too large. The landlord could not be expected to force the issue or to put itself at risk by allowing something that might expose it to a claim for breach of covenant.
The decision illustrates the dangers of resorting to trespass where a tenant cannot achieve its aims lawfully, especially where the landlord is not the only decisionmaker and provides a useful insight into the court’s approach in such cases.
Allyson Colby is a property law consultant