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Legal A – Z: “C” is for Consent

Q) I have received an application from my tenant to assign its lease, but the tenant has not provided enough information on the proposed tenant’s financial position for me to decide the matter. Can I simply refuse consent?

A) Yes. If your lease prohibits assignment “without the consent of the landlord not to be unreasonably withheld”, you are under a statutory duty to give your consent, where it is reasonable to do so, within a reasonable period and communicate your decision to the tenant in writing. There is no hard and fast rule on what constitutes a “reasonable period”, but the Court has suggested it will be a matter of days or weeks, rather than months. As a rule of thumb, a period of less than 21 days is likely to be reasonable in most cases.

You are entitled to ask the tenant to provide more information before making your decision. This will stop the clock on the “reasonable period” until the tenant provides the further information. However, you are not obliged to make enquiries and you are entitled to decide the matter on the application alone. This means that if you don’t have enough information to reach a reasonable decision, you can simply refuse consent.

If you decide to refuse your consent, you are obliged to communicate your decision to the tenant and state your reasons for doing so. The tenant is then at liberty to make a fresh application with more information if it wants to.

(Previously published in hard copy by Commercial Property Journal)