Examination Timing: 00H00M41S
SpeedyMove Limited is the freehold owner of a building in Oldcastle city centre. The building has two units at street level. SpeedyMove uses one of these as an estate agent's office and has let the other on a ten-year lease to Jane, who uses it as a bistro. The lease to Jane contains a covenant preventing her from assigning the lease without the prior written consent of her landlord. Jane wishes to sell her unit to SnazzyMove Limited, another estate agent and competitor of SpeedyMove.
Which of the following statements best describes the legal position?
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Jane can freely sublet the unit to SnazzyMove but cannot assign her interest in it without the consent of her landlord and it is likely that it would be reasonable for the landlord to withhold consent. The Landlord and Tenant Act 1927, Section 19, implies that the landlord's consent to assignment or subletting cannot be unreasonably withheld. However, it has been established in case law, such as Premier Confectionary (London) Ltd. v. London Commercial Sale Rooms Ltd. (1933), that it is reasonable for a landlord to withhold consent if the proposed assignee or subtenant's business would adversely affect the landlord’s business interests. In this case, SnazzyMove is a direct competitor of SpeedyMove, making it reasonable for SpeedyMove to withhold consent. Key Point: Landlords can reasonably withhold consent to assignments or subletting that would negatively impact their commercial interests, and tenants need to be aware of the implications of such covenants.
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