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Almost all commercial leases prevent the tenant from assigning the lease without obtaining consent from the landlord.
Disputes often arise and landlords, in particular, have to act quickly.
If the landlord refuses on one of the grounds set out in the lease, this cannot be challenged.
However, if the landlord refuses on a ground which is not set out in the lease, it all turns on whether it was reasonable for the landlord to withhold consent on those grounds.
Any covenant restraining assignment without licence or consent is deemed to be subject to a proviso that the licence is not to be unreasonably withheld: s19(1) Landlord and Tenant Act 1927.
License To Assign
It is not possible to contract out of this requirement by express agreement.
However, the parties are able to contract, when the lease is granted, for circumstances in which the landlord will be entitled to refuse consent: s19(1A) Landlord and Tenant Act 1927.
(This only applies to new tenancies, as defined by the Landlord and Tenant (Covenants) Act 1995).
Equally, if consent is given subject to conditions, those conditions must be reasonable; otherwise the landlord will be in breach of their duty.
Reasonableness is to be judged by reference to the impact on the landlord’s reversion and the rights which the landlord enjoys under the lease.