Assignment of lease
Whether a landlord’s refusal of consent to assignment was valid
In No 1 West India Quay (Residential) Ltd v East Tower Apartments Ltd , a leaseholder submitted a request for consent to assignment of its long residential lease. The landlord withheld consent, requiring a bank reference, arranging for a surveyor visit to inspect the property and charging a fee to the leaseholder.
The High Court held that consent was unreasonably withheld, as the fee charged was unreasonable. The other two grounds for withholding consent were found to be reasonable, even though neither was expressly referred to in the lease’s alienation covenant. The landlord appealed.
The landlord’s appeal was allowed by the Court of Appeal, and refusal to grant consent was held to be valid. As the fee was unreasonable, the Court considered whether the decision would still have been the same disregarding the fee; if the landlord would still have refused consent on the two reasonable grounds of the bank reference and surveyor inspection, then its withholding of consent was valid.
Rather than asking whether all the reasons given for withholding consent were reasonable, the Court looked at the landlord’s decision as a whole, and concluded that it was reasonable to withhold consent.
Advice and action for landlords
A useful decision for landlords, this case supports the withholding of consent in circumstances where a number of grounds for refusal are put forward.
Even where an unreasonable ground for refusal is put forward, if the decision overall can be found to be reasonable, the landlord’s position will remain valid.
Rather than asking whether all the reasons given for withholding consent were reasonable, the Court considered the landlord’s decision as a whole, concluding that withholding consent was valid.