Time to Respond
Published 17 February 2016
Most leases of commercial premises provide that the tenant cannot assign the lease without the consent of the landlord. The landlord is under a statutory duty not to unreasonably withhold consent. The landlord also has a duty, within a reasonable time, either to give consent to the assignment, or to provide the tenant in writing with reasons why consent is to be withheld.
So what constitutes a reasonable period of time? According to one Court Of Appeal decision, the time for the landlord to respond in some cases has to be measured in weeks rather than days, but even in complicated cases the time should be measured in weeks and not months. An informal protocol recently drawn up by leading Counsel and others suggests that the landlord should aim to communicate its decision within 21 days of receiving the tenant's application.
If a landlord is found by the courts not to have complied with the duty to respond within a reasonable time, it will be unable to defend a claim from the tenant that consent has been unreasonably withheld. If the tenant can prove it has suffered loss as a result, for example where it has been left to pay the rent and other outgoings for the premises, which would otherwise have been paid by the assignee, it could win a claim against the landlord for damages. In one recent case the tenant was awarded damages and interest totalling £214,000.