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Consent to Assign or Alter

It is common for commercial tenants to seek consent to assign their lease or to make alterations to the premises. Most landlords are happy to consent to this as long as certain conditions are observed and a proper licence to assign or alter is drawn up.

Any communication between the parties that implies that the landlord is minded to grant the consent but specifically states that the consent can only be seen as given once a licence is signed would normally be thought to do precisely what it says. Imply that the landlord is prepared to grant consent but on further conditions being imposed and that the consent will not therefore be granted until a full licence setting out all those conditions has been signed.

However, in the case of Alchemy Estates Ltd v Astor & Anor the High Court felt differently. It followed a decision in the Court of Appeal and held that a consent given in principle was sufficient to bind the landlord into the assignment sought by the tenants.

The practical upshot of this is simple. It was relevant in the Alchemycase that the lease did not provide for any conditions to be imposed on a consent to assignment. The first solution then is to ensure that any lease imposes conditions on assignment or alteration. Additionally, and most crucially it is vital that no suggestion is made that any consent will be given until the licence to assign with all relevant conditions is completed and a draft sent to the tenant. Only by giving no indication beyond the fact that a licence is being drawn up can a landlord avoid the principle of implied acceeptance put forward in Alchemy

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