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Prohibition or consent

This content applies to England & Wales

How the terms of a tenancy agreement may affect an occupiers right to assign.

If the tenancy agreement says nothing about assignment then, subject to any statutory limitations, the tenant is free to assign. If the tenancy agreement states that assignment is not allowed (an absolute prohibition), the tenant will be unable to assign (although see secure tenancies on the page on Rules for different tenancy types for exceptions). In most other cases, the tenancy agreement will only allow assignment if the landlord gives her/his consent (a qualified prohibition).

Refusing consent - qualified prohibition

If the tenancy agreement contains a qualified prohibition stating that the tenant may not assign without the landlord's consent, then the landlord cannot unreasonably withhold consent.[1] This limitation on the landlord's ability to refuse consent is automatically included as an 'implied term' into any tenancy agreement with a qualified prohibition.

'Unreasonably withheld'

Numerous court cases have discussed the meaning of 'unreasonably withheld', and some of the findings of these are summarised below. However, each case will be decided on its own facts:[2]

  • the purpose of a term in a tenancy agreement prohibiting assignment without the landlord's consent is to protect landlords from having their premises occupied in an undesirable way or by an undesirable assignee. The landlord cannot refuse consent on grounds that have nothing to do with the relationship of landlord/tenant, but can refuse if the potential assignee is not, for example, financially sound[3]
  • it may be reasonable for a landlord to refuse consent because of the purpose for which the assignee intends to use the premises, even if that purpose is not forbidden by the original tenancy agreement[4]
  • although landlords need only usually consider their own interests, there may be cases where there is such a disproportion between the detriment to the landlord and the detriment to the assigning tenant that it would be unreasonable for the landlord to refuse consent.[5] An example of this might be where the property is very difficult to assign and the tenants would have great difficulty in finding another potential assignee, whereas the landlord's loss in accepting the proposed tenant is minimal
  • the court has held that consent was not considered to be unreasonably withheld where the tenant had arrears.[6]

In the case of tenancies granted after 1 January 1996, a landlord has the right, in certain circumstances, to require that the tenant wishing to assign should act as the guarantor of the new assignee, where it is reasonable to do so.[7]

Discrimination

In addition to the above, the Equality Act 2010 makes it unlawful for a landlord to refuse consent on the grounds of a protected characteristic (ie disability, gender reassignment, pregnancy or maternity, race, sex, sexual orientation, and religion or belief).[8] A person who has the right to dispose of premises must not unlawfully discriminate against any person on the basis of any of the above protected characteristics by:[9]

  • the terms on which s/he offers to dispose of the premises
  • declining to dispose of the premises, or
  • the way in which s/he treats a person seeking the premises.

The right to dispose of premises includes a right to:[10]

  • assign
  • let, or
  • sub-let.

Harassment and victimisation by the person with a right to dispose are similarly prohibited, as it is discrimination, harassment or victimisation by a person whose permission is required for disposal. See Equality Law for more information on discrimination in relation to premises.

Getting the landlord's consent

It is important that consent is obtained if required by the tenancy agreement, as if it is not and an assignment is effected, this could give rise to ground for possession against the new tenant. Consent should be asked for and obtained before assigning, and it is not possible to argue that the landlord could not have reasonably refused consent after the assignment has taken place.[11]

The Landlord and Tenant Act 1988 introduced a procedure that can be followed to obtain consent. It applies where the tenancy agreement contains a qualified prohibition against assignment. The Act only applies to applications for consent made after 29 September 1988 and does not apply to secure tenancies.

The tenant must serve a written application for consent to assign on the landlord, and the landlord must reply in writing within a reasonable time (the Act does not define what is a reasonable time), giving consent unless it is reasonable not to do so. If consent is refused, the landlord must give the tenant reasons for the refusal.[12] If the landlord does not reply or withholds consent unreasonably, the tenant will be able to take a civil action for damages against the landlord for breach of this duty.[13] The onus of proof that any refusal of consent was reasonable is on the landlord.[14]

Tenants could also seek a declaration that the landlord is acting unreasonably where they do not want to take the risk of assigning without consent. Alternatively, the tenant could combine a claim for damages for breach of statutory duty with one for an injunction requiring the landlord to comply with her/his duty.

Secure tenants who are not covered by the 1988 Act would only have the option of applying for a declaration from the court or going ahead with the assignment in breach of the tenancy agreement.

Assignment without the necessary consent or where prohibited

Where the tenancy agreement has an absolute or qualified prohibition against assignment and the tenant assigns the tenancy without the landlord's consent, the assignment will still be effective (as long as it is by deed).[15] However, the assignee could be open to possession or forfeiture proceedings depending on the type of tenancy (see the page on Rules for different tenancy types).

[1] s.19(1)(a) Landlord and Tenant Act 1927.

[2] Braun v Westminster Anglo-Continental Investment Co Ltd [1975] 240 EG 927.

[3] Gibbs and Houlder Bros and Co. Ltd Lease, Houlder Bros and Co. v Gibbs [1925] Ch 575, CA.

[4] Rossi v Hestdrive Ltd [1985] 1 EGLR 50.

[5] International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513.

[6] Greenwood Reversions Ltd v World Environment Foundation Ltd and Mehra [2008] EWCA Civ 47. 

[7] s.16 Landlord and Tenant (Covenants) Act 1995.

[8] ss.2-8 and s.32(1) Equality Act 2010.

[9] s.33(1) Equality Act 2010.

[10] s.38 Equality Act 2010.

[11] Hendry v Chartsearch Ltd, The Times, 16 September 1998 CA.

[12] s.1(3) Landlord and Tenant Act 1988.

[13] s.4 Landlord and Tenant Act 1988.

[14] s.1(6)(c) Landlord and Tenant Act 1988.

[15] See for example the assured tenancy case of Sanctuary Housing Association v Baker (1997) 30 HLR 809.

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