By Nick Cannon
Nick Cannon offers his practical insight following the recent Court of Appeal judgment in Rotrest Nominees v Hautford Ltd, on the Leasehold Reform Act 1967 (LRA) and its effect on consent and user covenants in modern leases.
The tenant had a 100 year lease of a building on Soho, granted in 1986. The building was mixed use for planning purposes including retail, office and residential elements (on the top two floors only). Crucially, the lease permitted residential use anywhere in the building. The tenant wanted to convert the whole of the building to residential use and, eventually, to acquire the freehold by enfranchisement under the LRA. However, only the top floors of the building had planning permission for residential use. The tenant therefore needed to apply to the local authority for planning permission for change of use for the rest of the building. The lease stipulated that the tenant would need the consent of the landlord in order to make an application for planning permission, such consent not to be unreasonably withheld.