Refusal of consent by landlords

5 Sep 2018

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

Landlords consent is often required where a tenant is assigning a lease (selling a property).

In West India Quay, the tenant was selling residential apartments. Landlord’s consent was required, and as is normal the consent was not to be unreasonably withheld.

The landlord refused to give consent because the tenant refused to follow any of the landlord’s three conditions for giving consent:

  1.  The tenant would not pay the landlords costs (£1,250 plus VAT legal fees, and £350 plus VAT surveyors fees)
  2.  The tenant refused to allow the landlord to carry out inspections to check for breaches of the leases; and
  3.  The tenant refused to provide bank references for the buyers.

A landlords’ costs on assignment are usually a bone of contention with a tenant. But they rarely get argued all the way up to the Court of Appeal – which is what happened here.

The tenant won at the County Court, which found all three reasons of the landlord’s unreasonable. The landlord appealed.

The tenant won at the High Court, which found that the costs were too high, but the other two reasons were reasonable.

Finally the landlord won at Court of Appeal. The Court of Appeal held that a mixture of good and bad reasons did not automatically make the decision unreasonable – a Court should look at the overall decision, and not at individual reasons. A decision is likely to be reasonable unless good and bad reasons are connected so that the ‘bad destroys the good’, or ‘good’ reasons were ‘merely makeweights’.

If the decision would be the same relying on ‘good’ reasons alone, then the decision is reasonable.

It is worth bearing in mind that most leases usually allow a landlord to inspect on reasonable notice, whether an application is going on or not, so in general one would expect a landlord to be entitled to inspect to check for breaches. It is also worth remembering that a ‘reasonable’ decision is one that it would be open to a reasonable landlord to take, not necessarily one that you agree with!

If you or your property have been affected by these issues, get in touch with one of our expert lawyers. Call us now on +44 (0)20 7354 3000 or email enquiries@colmancoyle.com.

This blog is an edited version taken from a training webinar given by Michael Large of Colman Coyle to LexisNexis (a leading supplier of training to lawyers) on 16 July 2018.

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