Deadline - Word on Clock

A client called me the other day posing a question that I have been asked on a number of occasions.

In essence, he had received an application from his tenant for consent to assign to their lease, however the tenant had provided only sketchy information as to the proposed assignee’s financial standing.

My client wanted to know whether he could simply refuse consent or whether he had a duty to consider the application more fully.  In particular, he wanted to know whether the “clock had started ticking” in terms of his requirement to respond to the application in a timely manner.

I explained to him that as his lease prohibits assignment “without Landlord’s consent not to be unreasonably withheld or delayed”, he is under a statutory duty to provide consent, where reasonable to do so, within a reasonable period of time.  There is no hard and fast rule as to what constitutes a “reasonable period of time” however, the general consensus is that anything over  four  weeks is likely to be unreasonable in most instances.

I explained to my client that he is entitled to a full picture as to the financial standing of the assignee in the form of recent accounts together with bank and trade references.  As such, he is within his rights to request more information, and until such time as this information is provided, the clock will stop on the “reasonable period of time”.

That said, I advised the client that best practice would dictate that he should respond to the tenant in writing expressly stating that consent was being refused due to the lack of information, and stating specifically what further information was required in order to progress the application.  This avoids any ambiguity as to the status of the application by putting a “line in the sand” and makes it clear to the tenant what is required before the application can be considered more fully.

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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.