Georgina Redsell and Jennifer Meech answer a question on assignment of a lease
Question
The lease of my flat (rather unusually) provides that I cannot assign the lease without the consent of my landlord, such consent not to be unreasonably withheld.
In December 2013 I e-mailed my landlord’s agent seeking consent to assign. In mid-January 2014 the agent inspected and discovered alterations that I have carried out without consent.
In mid-March 2014 I resent the request by registered post to the landlord. Later that month the landlord consented to the proposed assignment on the condition that I reinstate the premises. He has also asked that I pay a £200 administration charge for the licence. Can I argue that he has unreasonably delayed and/or withheld his consent?
Answer
Under section 1(3) of the Landlord and Tenant Act 1988 a landlord must respond, in writing, to a request for consent to assign within a reasonable time, either: giving consent to assign (with or without conditions); or refusing consent with reasons. Failure to do so may result in damages being awarded (section 4). It will be for the landlord to show that consent was given within a reasonable period and that any conditions or refusal of consent were reasonable (section 1(4)). However, a tenant will need to be aware of the service provisions contained in the lease and ensure that its requests comply with these.
Explanation
Unreasonable delay?
Time will run from the date of service of your request for consent. A request will only be treated as served for the purposes of the 1988 Act if served in accordance with the lease (section 5).
You will need to check the terms of your lease, but an e-mail to the agent is unlikely to be a valid method of service.
In E.ON UK plc v Gilesports Ltd [2012] EWHC 2172 (Ch); [2012] 3 EGLR 23, the court decided that service by this means did not start time running. The lease in that case incorporated the service provisions of section 196 of the Law of Property Act 1925, which requires notices to be delivered to the recipient’s last known place of abode or place of business in the UK or sent by registered post.
Depending on the terms of your lease, time may not have started to run until the letter in March. What is a “reasonable” period of time will vary from case to case, but the Court of Appeal has said that it is likely to be measured in “weeks rather than days” but even in complicated cases “weeks rather than months” (Go West v Spigarolo [2003] EWCA Civ 17; [2003] 1 EGLR 133). Therefore, the timing here will probably be reasonable.
Unreasonable conditions?
Just because there is a breach of covenant does not mean that it will be reasonable to impose conditions on, or refuse consent to, an assignment. It will depend on the nature and gravity of the breaches and whether the landlord would be prejudiced by an assignment.
If the works are minor and/or can be remedied at the end of the term, the conditions are unlikely to be reasonable: Singh v Dhanji [2014] EWCA Civ 414.
If consent has been unreasonably withheld, you may be able to claim damages. In Singh the tenant was awarded more than £180,000, which represented the difference in the price the tenant would have received for an assignment in 2007 and the value of the lease at the date of the hearing.
The landlord may charge a fee “in respect of any legal or other expenses incurred in connection with such licence or consent” whether or not there is provision in your lease (Holding & Management (Solitaire) Ltd v Norton [2012] UKUT 1 (LC); [2012] 2 EGLR 53). This is an “administration charge” within Schedule 11 to the Commonhold and Leasehold Reform Act 2002 and is only payable to the extent that it is reasonable.
Recent decisions of the Upper Tribunal are not uniform regarding what will be determined to be reasonable. In Holding & Management, a sum of only £40 was allowed in respect of both prospective and retrospective licences. However, in Proxima GR Properties Ltd v McGhee [2014] UKUT 59 (LC); [2014] EGILR 20, £95 was a reasonable sum to charge for a retrospective licence and in Crosspite Ltd v Sachdev [2012] UKUT 321 (LC); [2013] 1 EGLR 31, £165 was held reasonable. In each case, the Tribunal considered the work required of the landlord.
Georgina Redsell is an associate at Charles Russell LLP and Jennifer Meech is a barrister at Enterprise Chambers
E-mail questions on any topic to egq&a@charlesrussell.co.uk and egq&a@enterprisechambers.com
