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Tenant's request

This page deals with the tenant's application to the landlord requesting consent to assign, sub-let or charge the lease, the form and contents of the request and how it should be served.


Introduction

The tenant must ask for consent. If he fails to do so and assigns or sublets there will be a breach of covenant however unreasonable the landlord’s refusal might have been.

A practice has developed whereby the request is made by the proposed assignee. If a solicitor for a proposed assignee wishes to act as agent on behalf of the tenant in obtaining consent this should be done without any ambiguity. Unless the application is made by or on behalf of the tenant it will not be a valid application.


Form and contents

In order to preserve the tenant’s rights under the Landlord and Tenant Act 1988 and, in any event as a matter of good practice, the request should:
  • Be in writing (s1(3)).
  • Specify what the tenant proposes to do (sub-let/assign/charge), in relation to which parts of the property. The tenant’s request must be clear, unequivocal and specific (Creery v Summersell Flowerdew & Co Ltd [1949] Ch 751). In the case of a sub-letting it is advisable to enclose a copy of the proposed sub-lease.
  • Identify correctly the proposed sub-tenant, assignee or mortgagee.
  • Specify correctly the intended user of the premises by the proposed assignee or sub-tenant and the nature and name of any business to be carried on.
The request should enclose sufficient information about the character and financial standing of the proposed assignee or sub-tenant for the landlord to make a commercial decision as to whether or not to grant the consent sought. Generally, the following should be enclosed:
  • The address of the assignee/sub-tenant, the directors and owners.
  • Bank reference(s), though these will be of limited weight if qualified.
  • Previous landlord’s reference, which should be detailed and include the letter which elicited it, unless the reference is entirely self-explanatory.
  • Three years previous audited/management accounts. These should show, roughly, three times the anticipated outgoings that the proposed assignee/sub-tenant would have a liability for.
  • Solicitors or accountant’s reference. The latter is particularly important where the assignee / sub-tenant is taking on a rental liability at a level higher than any it previously managed. The reference should explain the basis for confidence that such liability can be maintained.
  • Trading reference, from a fellow trader of respectable standing, stating the level of business transacted between them, relevant to the proposed business at the premises. Again, if the reference is heavily qualified or unenthusiastic it will be of limited weight.
  • Valuations, by qualified valuers of other properties held by the proposed assignee / sub-tenant with proof of the level of borrowings against those properties.

Service

The request should be served on the landlord’s address as stated in the lease. This is usually by reference to s196 of the Law of Property Act 1925, by leaving it at, or sending it by, recorded delivery to the landlord’s last known business address.

If the lease is silent as to the service of notices, it should be served in accordance with s23 of the Landlord and Tenant Act 1927 at the landlord’s last known place of business or to its secretary at its registered address (see 5(2) of the Landlord and Tenant Act 1988). In Norwich Union Linked Life Assurance Limited v Mercantile Credit Co Limited [2003] EWHC 3064 (Ch) this point was considered on an application to strike out L’s defence. L was saying that T had failed to comply with s5(2) of the Landlord and Tenant Act 1988, as to service, because the request for consent was served on L’s solicitor. The judge refused to strike out this aspect of the defence.

In E.ON UK plc v Gilesports Ltd [2012] EWHC 2172 formal application to assign had not been validly made by a sub-tenant to its immediate landlord and accordingly the landlord’s statutory duty to consider the application within a reasonable time was not engaged. An application by email was insufficient as it did not comply with the provisions of s196 of the Law of Property Act 1925, which had been incorporated into the lease (see paras 51-54 of the judgment).

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