Landlord’s consent for alterations – Is it reasonable to withhold consent?
In a recent case MESSENEX PROPERTY INVESTMENTS LIMITED v LANARK SQUARE LIMITED, Messenex was the tenant of a lease dated 24 September 1996 for a term of 200 years less ten days from 14 July 1986. The tenant requested consent from the landlord, Lanark to alterations to the demised premises by carrying out two sets of works including:
- Works to add three floors to the building (the Rooftop Works); and
- Works to the ground floor of the premises to convert it from business to residential use (the Ground Floor Works).
Legal Principles:
The Landlord unreasonably withheld consent to the Rooftop and Ground Floor works. Issues involves consideration of all section 19(2) of the Landlord and Tenant Act 1927 (LTA 1927) which is implied into all leases containing a covenant not to carry out alterations without the Landlord’s consent a proviso that consent to improvements will not be unreasonably withheld.
Issues between the parties:
1. The scope of application for consent made by the Tenant;
- The Landlord was aware that it was being asked to give its consent to certain works.
- The scope of the works to which the Landlord was being requested to give consent are sufficiently clear.
2. The reasons on which the Landlord relies for withholding consent;
- The Tenant was asked to provide, but failed to provide the structural engineers drawings;
The Landlord was not unreasonable in relying on the failure of the Tenant to produce structural engineer’s drawings in relation to the Rooftop Works as grounds for withholding consent for both the Rooftop Works and Ground Floor Works as they viewed the project as a whole.
- The works involve trespass on property retained by the Landlord;
The potential trespass on the retained Estate was not a legitimate reason for withholding consent at the time of the issue of proceedings. The terms on which the Tenant could have access to the retained land had already been agreed.
- Tenants failed to provide the undertakings for the Landlord’s reasonable costs;
Failure to provide an unconditional undertaking is at least one of the reasons why the Landlord withheld its consent to the proposed works.
- Lack of clarity in the Tenant’s proposals.
All that is required is that at the relevant time the Landlord was aware that it was being asked to give its consent to certain works and the scope of the works to which the Landlord was being requested to give consent was sufficiently clear.
It was clear the works the Landlord was being requested to give consent was clear and known to the parties. The reasons why the Landlord was not a good reason for withholding consent and the Landlord was not acting reasonably in relying on it.
3. Whether the Landlord acted unreasonably in relying upon the above reasons to refuse consent
Judge’s conclusion
The judge found the decision to withhold consent from the Landlord was reasonable based on two reasons:
- The failure of the Tenant to provide structural drawings to provide some assurance as to the effect of the proposals on the structural integrity of the building.
- The Tenant not providing an unconditional undertaking for Landlord’s reasonable costs.
Key Takeaways
The case established legal principles relating to consent for alterations in leases. Whilst there is no formal process that each party must follow, it is advisable for a Tenant to fully disclose application details, including drawings and specifications, to the Landlord as a best practice. Failure to provide such information may result in the Landlord withholding consent.
The judge’s decision also highlights that the Landlord retains the right to deny consent for alterations if the Tenant has not provided their undertaking to pay the Landlord’s reasonable cost.
How KTS can help?
Whether you are a tenant having difficulties obtaining the Landlord’s consent for alterations or a landlord being unfairly accused of being unreasonable for withholding consent for alterations, our commercial property solicitors can help you.
For more information or if you require assistance with consent for alterations, please call 0208 367 0505 or email info@ktslegal.com.
