It is a common term in a lease for the tenants to have to seek permission from the landlord if they want to do something new to or with the premises they let. Typically, such clauses specify that permission will not be ‘unreasonably withheld’.

However, what seems reasonable to one person may seem unreasonable to another, as a recent dispute shows. It involved a tenant who wished to apply for planning permission for its let commercial premises to be used for residential purposes. Under the lease, the application required the landlord’s permission, which was not to be unreasonably withheld. Such applications are normally relatively uncontroversial. However, the landlord took the view that allowing residential use would make it more likely that the tenant could later apply successfully for ‘enfranchisement’ (the legal right to buy the freehold). Since the landlord did not want that to happen, permission was withheld.

The tenant considered that denying permission on that ground was not reasonable and the legal argument ended up in the Court of Appeal.

The case turned on whether the landlord was seeking a ‘collateral advantage’ – in this case a restriction on use that was not within the lease itself. Strictly, anyone could apply for planning permission for change of use of the property, so there could be no good reason to prevent the tenant from doing so. The tenant’s right to apply for planning permission was therefore upheld.

Source: Residential Property News (PC)