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Consent to assign and the need for Speed
Mount Eden V Folia ([2003] NPC 95)
London Jan 2004
This case, heard in the Chancery Division of the High Court in July this year, highlights the need for landlords to respond quickly where they receive a request for consent to a sub letting or assignment. It confirms that landlords who fail to do so may lose the right to object to a potential sub lessee even if they have reasonable grounds for refusing consent. It also raises the possibility of punitive claims for damages against Landlords who delay unreasonably.
The Law
Where a landlord’s consent is required before premises can be assigned or sub let, the Landlord and Tenant Act 1988 provides that consent may not be withheld without reasonable grounds. The Act also provides that the landlords must respond within a reasonable time, providing the tenants with written notice of their decision and specifying any conditions attached.
The Facts
In Mount Eden v Folia the tenants applied for consent to sub let and the landlords were notified by fax of the need for urgency in their response. Nonetheless, the landlords took a period of approximately three weeks to respond, indicating that consent was refused. The tenants claimed that consent was unreasonably refused, and they were entitled as a result to proceed with the subletting without consent. The landlords applied to the court for an order restraining them from doing so. The tenants counterclaimed for an order that consent be given, or a declaration that they were entitled to proceed without consent. In the alternative, punitive damages were claimed for breach of the statutory duty to give consent in the Landlord and Tenant Act.
The Decision
The court decided that:
- In each case, it was a question of fact as to what constituted a reasonable time for a response to a request for consent.
- The landlords had not responded within a reasonable time. They had made a decision 3 weeks before informing the tenant of this.
- Landlords were precluded from relying on grounds for refusal communicated after a reasonable time, whether those grounds were good or not.
- As this was a claim for breach of statutory duty, it was possible for the tenants to claim exemplary or punitive damages
Further information
If you would like further information or indeed are facing difficulties yourself, please feel free to contact:
Disclaimer
This article is copyright Sprecher Grier Halberstam LLP.2003 and should not be construed as legal advice or opinion in any specific facts or circumstances. The contents are intended for general information purposes only. You are urged to contact a suitably qualified lawyer for specific advice.
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