#4880 - Licences - Property Law and Practice

Licences 1) What types of licence might be granted? a) Licence to assign b) Licence to sub-let c) Licence to carry out alterations d) Licence to change the use of the premises 2) In what form should the licence take? a) Inspect the lease for clauses on granting consent for certain actions b) What the clauses may state in relation to form of consent 3) Who drafts the licence a) The landlord's solicitor b) It is then amended by the tenant's or the assignee's solicitor Clause / lease states the landlord's consent must be given in a formal licence document A formal licence document will be required to provide consent to the action Clause / lease states the landlord's consent may be 'in writing' A letter from the landlord's solicitor confirming that consent has been given will be sufficient No express clause / lease provision regarding form of consent Oral consent may be sufficient 4) Who gives the consent Who gives consent? Where there is only a landlord and a tenant and the tenant wants to assign, grant an under-lease, make alterations, change the use a) The landlord gives consent; and b) The mortgagee gives consent Where there is a sub-tenant who wishes to assign, grant a sub-underlease, make alterations or change the use a) The immediate landlord (the tenant) and the head landlord give consent; and b) The mortgagee gives consent How do you ensure the relevant parties are informed they need to consider whether to give consent? 5) Undertakings given by solicitor a) A landlord might require an undertaking from the tenant's solicitors that they will pay the landlord's costs if the matter aborts b) This should follow the SMART approach: * Specific * Measured * Agreed * Realistic * Timed 6) Should a landlord grant consent in principle while waiting for the licence to assign being finalised? No. A licence in principle letter, will be deemed written consent even before a formal agreement. This is even if it is headed "subject to contract" - Aubergine Enterprises v Lakewood International 7) Is consideration necessary for the licence? No. Any of the licences should be executed as deeds. 8) The licence needs the required formalities and signatures to be executed as a deed No. Any of the licences should be executed as deeds. There is a duty on any party receiving an application for consent to pass the application to any relevant third party whose consent is required. This must be done within a reasonable time - s.2 Landlord and Tenant Act 1988