Lease Assignment: Unreasonable Conditions Set By Landlords.

Some landlords are unwilling to give consent to the Assignment of a lease, without demanding certain conditions be met by either (or both) the existing and prospective tenant.

Some of these conditions can be onerous. However the Court of Appeal has recently affirmed earlier cases, deciding that landlords cannot be too demanding in these circumstances.

Whilst commercial landlords can demand conditions to protect their premises from being let in certain undesirable ways, they cannot refuse to consent to an assignment to a new tenant on any grounds that have nothing to do with the lease itself. Also, a landlord cannot require greater security than would be available to it if the lease had not been assigned.

The test the landlord is that of a reasonable man:

  • It may be reasonable to refuse consent, or impose conditions, if it is necessary to protect the landlord’s interest under its lease.
  • However it will be unreasonable to impose a condition that is designed to increase or enhance any rights the landlord enjoys under the original lease.

Therefore it is important to note that as a general rule, where a landlord is refusing consent or imposing conditions, then the above test should be applied to see whether the condition will put the landlord in a better position to that which he was in with the current tenant.

If you would like any advice in relation to your commercial lease, then get in touch with our Commercial Property department and speak to a specialist.

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