One Reasonable Condition is Sufficient for Landlord

When a tenant wishes to assign a lease, it is usual for the landlord's consent to be required, and that consent can be withheld if there are sufficiently good grounds for so doing.

In a recent case, a landlord was asked by a tenant to agree to the assignment of leases on flats in London's Docklands. The landlord imposed several conditions on the assignments.

The conditions were that the tenant should cover the landlord's legal fees for the assignment and the cost of carrying out inspections of the flats, and that the landlord should be provided with a bank reference to give comfort as regards the financial capabilities of the new tenants.

The tenant went to court arguing that the conditions were unreasonably excessive. The lower court agreed that the legal fees requested were extreme and held that the landlord's refusal to grant consent to assign was therefore unreasonable. The landlord appealed the decision.

The Court of Appeal took the view that the conditions were 'freestanding'. Just because one of the conditions was not reasonable did not mean that the others were 'infected'. Each stood alone and the tenant's failure to meet the reasonable conditions was sufficient reason for the landlord to decline to assign the leases.

The decision will come as a relief to landlords who seek to impose multiple conditions on the assignment of leases.