Landlords Should Choose Their Words Carefully

If a tenant asks for your consent think twice before responding with phrases such as “in principle” and “subject to licence”.

The warning comes from Catherine Wolstencroft, associate and specialist in commercial property law at leading regional legal firm Furley Page, who explains: “Landlords should take care when dealing with any requests from tenants in order to avoid unintentionally giving consent when conditions remain to be fulfilled or formalities completed.”

An example of how easy it is for words to be taken the wrong way was highlighted in the Court of Appeal case between Aubergine Enterprises and Lakewood International back in 2002. The court ruled that letters sent to the tenant headed ‘subject to licence’ and containing conditions amounted to actual written consent.

Since then, agents and advisors have tried to avoid falling into the same trap by expressly stating that any correspondence with the tenant doesn’t constitute actual consent.

But the issue has raised its head again following the recent Chancery case of Alchemy Estates v Astor, says Catherine.

She comments: “A judge in the case made the point that even when coupled with the statement that ‘such consent will only be provided on the completion and delivery of a formal licence executed as a deed’, the wording wouldn’t avoid the inadvertent granting of consent where it was expressed to be subject only to reasonable conditions.

“Although this observation didn’t form part of the formal judgment in the case, it’s an indication of the way the court will approach such questions - and will undoubtedly encourage a tenant determined to press ahead with plans without a formal licence."

The Aubergine and Alchemy cases concerned applications for consent to assign but Catherine thinks it’s safe to assume that the principles would apply equally to other consents required under a lease – and possibly those which fall outside the normal terms, too.