Landlords’ grounds for refusing consent under the terms of a residential flat lease

The standard caveat to this requirement is that such consent cannot be unreasonably withheld or delayed by the landlord.

Under the Landlord and Tenant Act 1988, the landlord has the following key duties when requested to provide consent to any of the above:

1. To give consent except where it is reasonable not to do so
2. To give consent within a reasonable amount of time

The duty to give consent – what is reasonable

When deciding if the refusal of the consent is reasonable or not, the first question that must be asked is whether the landlord’s refusal is based on grounds that have nothing to do with the relationship between the landlord and tenant. If this is the case, consent will be held to be unreasonable. For example, the landlord and tenant are in another dispute over a service charge.

If, however, this is not the case, the matter will need to be decided on the facts. Importantly, the landlord must show that their conduct was reasonable and not that it was right or justifiable. The onus is on the landlord to prove they have been reasonable.

No.1 West India Quay (Residential) Limited v East Tower Apartments Limited [2018] EWCA Civ 250

In the recent case of No.1 West India Quay (Residential) Limited v East Tower Apartments Limited [2018] EWCA Civ 250, the point was explored further. In this case, the tenant owned a number of properties with a lease term of 999 years, contained in an apartment block. The landlord refused consent on three grounds. These were:

1. The Tenant refused to undertake to pay the landlord’s legal fees of £1,250 plus VAT (per flat).

2. The Tenant also declined to pay the landlord’s surveyors costs of £350 plus VAT (per flat). The reason for these costs was that the landlord required an inspection of each flat to check whether there were any current and subsisting breaches of the leases.

3. The Tenant failed to provide a bank reference, to the landlord, for the prospective assignees in order to assess as to whether they would be able to pay the high service charge figures. The high service charge was due to works on the property amounting to over one million pounds.

The court discussed that two of the reasons were valid, being the points mentioned above in relation to the surveyors’ costs and bank reference, but that the undertaking for legal fees was unreasonable. It was held that the landlord was entitled to rely on the two good reasons. It was further confirmed that the landlord is under a duty to show that it was reasonable to refuse consent, not that each individual reason was reasonable.

This decision means that when Landlords are issuing a notice, refusing consent under the provisions of a lease, they should consider whether any unreasonable decisions outweigh the reasonable ones.

Reasonable amount of time

It is vitally important that the landlord’s decision is not unreasonably delayed. There is not a set time limit, and the length of time will depend on factors such as:

• What information the landlord requests
• How the tenant responds to requests for such information
• Whether the tenant has communicated any sort of urgency in relation to the transaction
• The complexity of the transaction
• Any loss to be suffered by the tenant in no expediting matters

Case law has confirmed that the “clock” for the reasonable time to start commences from the tenant’s application for consent, rather than the receipt for an appropriate undertaking for costs.

The duty in the Landlord and Tenant Act 1988 can also extend to commercial leases, but this is not within the scope of this article.

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This legal information is not advice and should not be treated as such. If you have any questions regarding landlords’ grounds for refusing consent, please contact our residential property team.