Cases on landlords’ consent to alterations are relatively rare, certainly when compared to cases concerning consent to assignment.  But 2024 has already brought us two such cases, each of which gives some useful guidance on points for landlords to bear in mind when faced with applications for alterations, as well as a warning not to be complacent when refusing consent.

In Messenex Property Investments Ltd v Lanark Square Ltd, the tenant had applied for consent to build three additional storeys onto a four storey mixed-use building in the Isle of Dogs, as well as converting the ground floor commercial use into flats.  The parties had corresponded for some three years about the scope of the proposals, and the tenant’s plans had evolved during that time.  Draft licences were in circulation but eventually the tenant ran out of patience and issued proceedings for a declaration that consent had been unreasonably withheld.  The landlord’s defence was that it was reasonable to withhold consent, and it gave four reasons: 

  1. The tenant had failed to provide structural engineers’ drawings for the additional floors to be constructed;
  2. Carrying out the works would involve a trespass over the landlord’s retained land, so the landlord could refuse consent absolutely;
  3. The tenant failed to provide unconditional undertakings in respect of the landlord’s costs; and
  4. There was a lack of clarity in the tenant’s proposals.

Only reasons one and three were considered reasonable by the judge, and therefore the landlord was reasonable overall in refusing consent (following the West India Quay case).  He held: 

  1. On the structural drawings, the judge agreed that the works were significant and that the tenant’s own planning application contained a report which threw doubt on whether the building could support additional floors, so this was a reasonable reason;
  2. The trespass was not a reasonable reason because the parties had been negotiating draft scaffolding and other licences, which would have resolved the trespass issue;
  3. The refusal to provide a further unconditional costs undertaking when requested was a reasonable reason for refusing consent; and
  4. An application for consent to alterations can develop right up until the point the proceedings are issued.  The tenant’s proposals are not set in stone at the point the application was first made; what matters is what the landlord knows about the tenant’s plans at any point during the process.  The question is: does the landlord understand what it is being asked for?  Here, the landlord knew exactly what the tenant was proposing by the time the application was made and therefore lack of clarity was not a reasonable reason. 

The law governing applications for alterations is s.19(2) of the Landlord and Tenant Act 1927.  This can be contrasted against the law governing applications to assign in s.1 Landlord and Tenant Act 1988.  Although there are broad similarities, there are some important differences.  One is that the application under s.19(2) LTA 1927 does not have to be ‘written’. This led the judge to surmise that the application process can be a fluid one, and that the reasonableness of the landlord’s decision has to be judged against the facts and circumstances, which can be viewed as late as the point the proceedings are issued. 

The case is a reminder that landlords need to be careful:  it may be unclear that an application has indeed been made if writing is not a requirement.  If the tenant informs the managing agent, during a routine inspection, that it would like to do some works and it provides some basic drawings, that may suffice. In addition, every piece of information provided by the tenant throughout the consent process must be carefully considered and factored into the decision (bearing in mind that knowledge of agents is generally attributed to the landlord).  It would be risky, for example, to refuse consent on the basis of the facts as initially presented, and to fail to consider the cumulative impact of further information, perhaps provided in dribs and drabs.  One also wonders whether the fact that the landlord had been actively negotiating a draft licence for alterations and scaffolding licence for three years (to the point of engrossments), may have put it in a trickier position, even though the emails and drafts were doubtless all carefully labelled ‘subject to licence’.  

Jacobs v Chalcot Crescent (Management) Company Ltd was a residential consent case.  The tenant had applied for consent to alterations of a duplex flat in a converted terraced house. The landlord appointed a building surveyor to advise, but after nine months of correspondence, consent had not been granted and the tenant applied to court for a declaration that consent had been unreasonably withheld.   The landlord relied on its surveyor, who opined as to fire safety matters, but admitted under cross-examination that others, e.g. a fire engineer, would be more qualified to assess this.  On appeal (primarily on a separate procedural point), the judge held that it was unreasonable to rely on the surveyor’s general knowledge and experience when the surveyor had admitted that another specialist would have been better placed.  In any event, he found that there was an obvious suitable alternative to refusing consent, which was to require certain mitigation works to be carried out.

For landlords, then, there are two main takeaways from this case:  firstly, ensure that your surveyor has the right expertise to advise you when determining the application.  Relying on inaccurate or generalist advice could be costly. Secondly, a blanket refusal may be unreasonable if there is an obvious way to alleviate your (legitimate) concern, and this can be made a condition of consent.