Assigning Premises

legal_updates

The Landlord and Tenant Act 1927

Author: Polly Davies
Published:
Reading time: 2 minutes

This article is 4 years old.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

A longstanding Lawgistics client recently decided to give up the motor trade and return to the construction industry, but needed to sublet their premises due to some time remaining on their lease. 

The proposed third party was another car dealer, so no change of use was proposed.  Our client’s lease contained no absolute prohibition on assigning or subletting premises but was clear that the landlords consent was required and that such consent was not to be unreasonably withheld, in accordance with the Landlord and Tenant Act 1927. 

However, our client’s freeholder landlord delayed somewhat in giving the consent which we reminded them was in breach of their statutory duty under the Landlord and Tenant Act 1988 which:

•    Imposes a statutory duty on a landlord who receives a written application for licence to assign or sublet to give consent unless it has reasonable grounds not to do so. He must also notify the tenant of his decision and his reasons within a reasonable time. Further, if the consent is subject to any conditions, not only must these be reasonable but they must also be spelt out in the landlords reply.

•    Places on the landlord the burden of showing that any refusal or the imposition of any conditions was reasonable. He need only show that his conclusions were such as might have been reached by a reasonable man in the circumstances, but it is for him and not the tenant to prove this.

•    Finally, the act gives a tenant the right to sue for damages suffered as a result of a landlord’s unreasonable refusal.  Loss of rental payments from the assignee for example due to them not being able to take up the premises following the tenant’s evacuation.  

Common law has since determined that an application to a freeholder to assign premises must be dealt with “expeditiously” and “at the earliest sensible moment”, finding that a reasonable time will sometimes have to be measured in weeks rather than days, but that even in complicated cases, it should be measured in weeks rather than months.

Delays over premises can have a significant commercial impact of the business involved, thus giving rise to potential damages, and both freeholders and tenants should bear the issue of “reasonable time” in mind.  

Polly Davies

Legal Advisor

Read more by this author

Getting in touch

You can contact us via the form or you can call us on 01480 455500.