Landlord and Tenant Update

Common Sense in the House of Lords!

At last, a common sense decision on a landlord’s refusal to consent to an assignment. A tenant had a 114 year lease which listed a number of prohibited uses. The current tenant wished to assign and the landlord council refused licence to assign on the basis the assignee’s intended use would fall foul of the user provision. The position was complicated, and no doubt the assignee felt aggrieved, by the fact that the council, in its capacity as planning authority had granted planning permission for the proposed use.

Was the Landlord unreasonable in refusing consent?

No. Just because the Landlord could sue the assignee for breach of the lease covenant did not mean it was unreasonable for the Landlord to refuse consent. A previous case ruling, some 30 years old, was overruled. The case (Ashworth Frazer Ltd v Gloucester City Council) also neatly illustrates the rule that just because a Local Authority gives consent to something in one capacity it does not mean it has given it in all its capacities.

When is a dwelling not a dwelling?

There is no clear decision on this but the House of Lords recognised in Oratemp Ventures Ltd v Collins that a dwelling can be a dwelling and someone’s home, and so fall within the Housing Act 1988, even though the home has no cooking facilities. In this case the lease of a bedroom which included a toilet, shower and washbasin was held to be a lease of a dwelling.

Landlord and Tenant (Covenants) Act 1995

Late 2001 saw the first ruling on releasing a landlord from its obligations. When a landlord sells its reversion it can serve a notice under s 8 of the Act, asking the tenant to release the landlord from the "landlord’s obligations under the tenancy". In BHP Great Britain Petroleum Ltd v Chesterfield Properties Ltd & another, the landlord had entered into an agreement for lease under which it undertook refurbishment works. When the landlord transferred its reversion it duly served a s 8 notice. The tenant did not object to the release. In 1999, defects appeared in the property and the tenant sued the landlord under the agreement for lease. One of the landlord’s arguments in resisting liability was that the s 8 procedure meant it was now released.

The Court of Appeal held that obligations that are personal to the original landlord are not "landlord covenants" within the meaning of the 1995 Act and a section 8 notice is irrelevant to them and ineffective.