Landlord’s Consents
Transferability
Deasy’s Act 1860 provides that the estate or interest of a tenant under a lease is capable of being assigned by a deed or instrument in writing signed by the assignor or his agent lawfully authorised in writing. It is also capable of being passed by will, operation of law, such as by surrender.
This provision applies to leases and even to tenancies that are created orally, such as weekly or in tenancies from year to year.
The fact that a lease or tenancy is capable of being assigned does not, of course, mean that it may be assigned without the landlord’s consent where this is required, which is almost invariably the case.
Covenants Bind Successors
The position in relation to leasehold covenants differs from that of freehold covenants. Prior to Deasy’s Act, the tenant was bound by covenants in the lease, which touched and concerned the land. Obligations touching and concerning the land are those which benefit it as such. They are covenants that benefit the land and not the owner, tenant or landlord in a personal capacity.
Under Deasy’s Act, successors in title may enforce covenants under the lease. The Act provides that successors are bound by covenants in the lease. This has been interpreted not to apply to those which require performance by the original tenant as such. They must be covenants that benefit the land as such and are not a purely personal obligation.
The same principles apply to enforcement by the landlord or tenant against the other. Obligations between the original landlord and tenant could potentially continue without any requirement that they touch and concern land as a personal contract.
Deasy’s Act Provisions
Deasy’s Act provided that the benefit and burden of covenants contained or implied in leases and tenancies are enforceable by and against successors of the original landlords and tenants. Where part of the land is assigned, the benefit and burden of the covenant run with that part.
Deasy’s Act does not require expressly that the covenants must touch and concern the land. However, the courts have interpreted in, a similar requirement. Obligations on the part of the original landlord and tenant, which are not capable of being performed by third parties, do not bind successors.
The assigning tenant is discharged from future obligations under lease covenants when he assigns with the landlord’s consent and gives notice accordingly. Written notice is to be given to the landlord. The assignee has the benefit of the covenants from the other party while he is the tenant.
Assignment and Sub-Lease Rights
There are provisions that modify the terms and conditions in leases that restrict assignment (transfer or a sale or subletting). The provisions apply to tenements. These are land covered with buildings or land where the land element is subsidiary and ancillary to the building.
The provisions override anything in a lease and cannot be contracted away. Where a lease contains an absolute restriction on assignment, it is to take effect as a covenant not to alienate (assign or transfer it) without the landlord’s consent.
A lease with a covenant not to alienate is deemed to provide that it may be alienated with the landlord’s consent. It is further implied term that the consent of the landlord is not to be unreasonably withheld.
Consents to Change of Use
A covenant in a lease of a building absolutely prohibiting the alteration of the user of the tenement shall have effect as if it were a covenant prohibiting such alteration without the consent of the landlord.
In every lease of a building in which there is contained a covenant prohibiting the alteration of the use of the property without the consent of the landlord, the covenant shall, notwithstanding any express provision to the contrary, be subject—
- to a proviso to the effect that the licence or consent shall not be unreasonably withheld, but this proviso shall not preclude the landlord from requiring payment of a reasonable sum in respect of legal or other expenses incurred by him in connection with the licence or consent, and
- unless the alteration involves the erection, provision or reconstruction (otherwise than as an improvement ) of any building or structure, to a proviso that no fine or sum of money (other than any sum authorised below) nor any increase of rent shall be payable for or in respect of the licence or consent, and
- if the alteration would cause a transfer or increase of any rates, taxes or other burden to or of the landlord, to a proviso that all expenditure incurred by the landlord by reason of the transfer or increase shall be reimbursed by the tenant to the landlord as and when so incurred and shall be recoverable from the tenant by the landlord as rent under the lease.
Consent to Alterations
An “improvement” means any addition to or alteration of a building or structure and includes any structure which is ancillary or subsidiary thereto but does not include any alteration or reconstruction of a building or structure so that it loses its original identity.
A covenant in a lease of a building absolutely prohibiting the making of any improvement on a bulidng shall have effect as if it were a covenant prohibiting the making of the improvement without the consent of the landlord. In every such lease which there is a covenant prohibiting , the making of any improvement without the consent of the landlord, the covenant shall, notwithstanding any express provision to the contrary, be subject—
- to a proviso that the licence or consent shall not be unreasonably withheld, and
- to a proviso that no fine or sum of money in the nature of a fine (other than a reasonable sum in respect of legal or other expenses incurred by him in connection with the licence or consent) nor any increase of rent shall be payable for or in respect of the licence or consent.
Unreasonable Withholding of Consent
A letting without consent or where it would be reasonable for the landlord to refuse consent is ineffective and void. The tenant may apply to the court for a declaration that the landlord has unreasonably withheld consent.
In theory, a tenant could assign a lease on the basis that it would be unreasonable for the landlord to withhold consent. However, most assignees would be reluctant to take an assignment in the circumstance. A declaration may be sought retrospectively.
The Irish courts have refused to allow a claim for damages for breach of an implied covenant by the landlord that consent would not be unreasonably withheld. This right was specifically granted by statute in the United Kingdom.
Proving Unreasonableness
The landlord is not to unreasonably withhold consent. The onus of proving unreasonableness lies on the tenant. This principle has been criticised and appears to be based a little more than the fact that it is usually the tenant who needs to make the application to the court.
The landlord may not charge a sum as a condition of consent. He may recover his expenses such as solicitors and surveyor’s fees.
The landlord must consider the application on its merits. It cannot simply operate a blanket policy to refuse consent. It is entitled to consider its own interest. It is entitled to full information in relation to the proposal for use. The tenant’s particular needs or trading difficulties are not directly relevant.
There must be a good objective, reasonable basis for withholding consent. The lease may specify grounds that are relevant to the decisions. Regard will be had to those grants.
The landlord may give grounds for a refusal to the court even if no ground had previously been stated or that reason has not been previously advanced. The court will have regard to the genuineness of the landlord’s reasons and the objective basis for it. The landlord may be entitled to act in his own financial interest. It cannot act for an extraneous reason unrelated to the property.
Equal Status Act
The Equal Status Act prohibits discrimination in relation to the transfer or disposal of property on the prescribed grounds of discrimination. They include membership of the travelling community, gender, family status, marital status, sexual orientation, age, disability and race.
There are a number of exceptions such as in relation to sharing accommodation, where questions of privacy may arise on gender grounds. There are also exceptions where accommodation has been provided in a person’s home, which is not separate and self-contained or where accommodation affects the person’s private or family life of any other person residing there.
Consent Issues
No act by a landlord is a waiver of a covenant unless the landlord specifically so signifies in writing. A consent given by a landlord to subletting in a particular case is not a general waiver of the requirement of the covenants.
Section 3, Conveyancing Act, 1892, provides that no lump sum be charged for the landlord’s consent. The Landlord and Tenant (Amendment) Act 1980 provides further that landlords may only require payment of reasonable sums for legal and other expenses incurred.
Similar provisions apply in the Residential Tenancies Act by which the landlord may recover expenses incurred in connection with the application but may not charge a premium for consent.
Restraint of Trade
See the separate section in the contract law section in relation to the restraint of trade doctrine. The doctrine applies where a person who has existing freedom agrees to restrain his use of premises or limit his or its trade.
It does not appear to apply where a person with no prior freedom to trade in a particular place agrees to a restriction. The doctrine applies to the use of land and also obligations generally which restrict trading activity.
Missing Landlords
Where a lease of a building contains a covenant prohibiting or restricting the doing by the lessee of any particular thing without the licence or consent of the lessor, and
- the rent reserved by the lease has not been paid for five or more years, and
- the lessor is not known to and cannot be found by the lessee,
the Court may, on the application of the lessee and after the publication of such (if any) advertisements as the Court directs, authorise the lessee, subject to such (if any) conditions as the Court thinks fit to impose, to do the particular thing so prohibited or restricted and thereupon it shall be lawful for the lessee to do such particular thing without the licence or consent of the lessor, in accordance with the conditions (if any) so imposed.
Long Proprietary Leases
Where the lease is made for a term of more than forty years and is made in consideration wholly or partially of the erection or substantial addition to or improvement or alteration of buildings there is deemed to be a proviso to the effect that, in the case of any alienation of the tenement in contravention of the covenant effected more than seven years before the end of the term, that no such licence or consent shall be required if notice in writing of the transaction is given to the lessor within one month after the transaction is effected, and
Where such alienation would cause a transfer or increase of any rates, taxes or other burden to or of the lessor, there is deemed to be a proviso that all expenditure incurred by the lessor by reason of the transfer or increase shall be reimbursed by the lessee to the lessor as and when so incurred and shall be recoverable from the lessee as rent under the lease.