Can a Landlord Oppose Tenant's Change of Use Application?
At the end of last year, there was a landmark case, in which the Supreme Court ruled that a landlord’s refusal to consent to a change of use application by its tenant was not unreasonable.
A sub-tenant at the property had converted four out of the of six floors of the property into flats and then sought the landlord’s consent to apply for the necessary planning permission.
Under the terms of the 1986 lease which governed the relationship between the landlord and the tenant, it said that the landlord's consent to a change of use of the property would not be “unreasonably withheld”.
The landlord refused to consent to the change of use application, on the basis that with majority of the building becoming residential, the tenant would acquire the chance to compulsorily purchase the freehold, which would in turn would devalue the property.
The County Court, High Court and Court of Appeal dismissed the landlord’s arguments, and agreed with the tenant that the refusal to consent was unreasonable, particularly as residential use was specifically permitted under the lease.
The Supreme Court however held that the landlord was acting reasonably in protecting the value of the property, assessing “reasonableness” by reference to the facts at the date of the tenant’s request for consent, not what the parties contemplated when the lease was granted.
If you are in dispute with your landlord or are concerned with your leasehold covenants, or if you are a landlord having problems with a tenant, contact us today to find out how we can help you.
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