Licence To Assign A Lease

This is section 1 of the Landlord and Tenant Act 1988.This provides that the landlord owes a duty to give consent within a reasonable time, save where it is not reasonable to do so.

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Correspondence did continue in respect of the licence after the assignment although it was not finalised or completed and the landlord was not informed of the assignment of the lease.

The assignee subsequently went into administration owing a significant amount of money to the landlord.

In 2009 the assignee went into administration, owing a significant amount of rent arrears.

The landlord sued the original tenant, Gilesports, for arrears, on the basis that no consent to the assignment had been given, so Gilesports remained liable.

But the Court decided that the landlord had not unreasonably delayed their consent in this case.

Gilesports therefore remained liable to pay the outstanding rent.

When a decision to assign a lease is made and terms are agreed the temptation to “get the deal done” can often take over. ON UK plc v Gilesports Ltd [2012] comes as a stark reminder to landlords and tenants alike of the need to ensure that formal consent of all parties to an assignment is obtained.

Background This case concerned a retail unit let by a superior landlord to a head tenant (for purposes of this article referred to as the “landlord”) (the “superior lease”).

There had been delays by Gilesports and their solicitors in dealing with the application process.

The court referred to established case law, which indicates that the “reasonable period”, within which a landlord may consider an application, may be measured in weeks rather than months.