Landlord’s Refusal to Grant Consent to Assign/Change Use
In a recent High Court decision in a case entitled “Perfect Pies Limited (in receivership) and Pearse Farrell v. Chupn Limited”, the High Court addressed the manner in which a landlord could claim to reasonably withhold consent on a tenant’s application for consent to assignment.
The Court has explicitly clarified that refusal of consent for an improper motive could undermine landlord’s otherwise reasonable grounds – in this case, the Court determined the landlord had decided it wanted to retake possession of the property, and that it then went about seeking out breaches by the tenant of the lease (short term licences of part and what were minor unremedied disrepairs from an existing schedule of dilapidations although the proposed assignee had openly confirmed it would assume responsibility for same) to justify a decision to refuse consent to assignment.
Furthermore, the Court stated that a landlord could not subsequently rely on grounds where until the relevant date for consideration of the reasonableness of its refusal to grant consent (the date of issue of proceedings by the tenant), it had an improper motive for refusing consent.
The key here is that a Landlord should immediately address any request for consent to assignment (or indeed change of use), that it should promptly evaluate what documentation is received and seek any outstanding necessary documentation, and that it should be upfront about and evaluate its concerns, while bearing in mind that the Court will find consider that considerations outside of the landlord/tenant relationship would not be a proper basis for refusing consent.
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Patrick Ahern, Partner (firstname.lastname@example.org)