Given the fluid nature of modern businesses, there will be times when a tenant wishes to apply for planning permission. This could be for structural modifications or for a ‘change of use’ to a residential or commercial property. Tenants will need to seek consent from the landlord before applying for planning permission.
Leases commonly contain a provision allowing the tenant to apply for planning permission however only where the landlord has already given consent. Improvements carried out as a result of granted planning permission can also ultimately be for the benefit of the landlord.
Landlords must think carefully when considering planning applications. They should consider (if refusing consent) whether the lease requires them to act reasonably.
What is often an area of contention however, is whether or not a landlord needs to act reasonably when considering a request for such permission. In the circumstances that the landlord must act reasonably, what indeed constitutes unreasonable refusals.
The Court’s approach
The Court of Appeal recently considered whether a landlord was unreasonable in refusing consent for his tenants to apply for planning permission.
Rotrust Nominees Ltd v. Hautford Ltd
In Rotrust Nominees Ltd v. Hautford Ltd (2018) EWCACIV765 the Court of Appeal found that a landlord was unreasonable in refusing consent. The tenant was looking to apply to the local authority for a ‘change of use’ in the rented property. The property was a terraced building and consisted of a basement, ground floor and four other floors. The basement and the ground floor were used for retail purposes and the first and second floors were being used for offices. The third and fourth floors were used for residential use. The lease permitted residential use for both part and the whole property.
The tenant requested consent from the landlord to apply for planning permission for a ‘change of use’. He was looking to develop the first and second floors into residential dwellings. The landlord refused to consent. His grounds for refusal was that the additional residential portion of the property would allow the tenant make a successful claim for enfranchisement under the Leasehold Reform Act 1976.
Court of Appeal’s decision
The matter proceeded to the Court of Appeal. It was found that the landlord’s refusal to consent was in fact unreasonable. The Court found that the tenant’s covenant in the lease to obtain consent from the landlord prior to carrying out developments was put in place to protect that landlord against planning enforcement from the Council. There was no restriction regarding residential use of the first and second floors in this case. The Court found that to restrict the use of the property in such a way would be a re-writing of the user clause.
How we can help
Levi Solicitors Commercial Litigation Department deals with landlord and tenant disputes. We have recently been successful in defending (on behalf of a commercial landlord) a claim for damages. This was due to alleged unlawful/unreasonable refusal of consent to assign a commercial lease.
Get in touch
Our team of specialist property dispute resolution solicitors can assist at any stage of a dispute. We can advise you from mediation through to court action and injunctions. For a free consultation call Levi Solicitors on 0800 988 7756 (FREEPHONE) or email email@example.com.