3/3/2011

 A recent enquiry about a landlord unreasonably withholding consent raised some interesting issues.  The query related to a proposed change of use under a lease.

 A change of use can be prohibited in lease.  However, if it is allowed with the consent of the landlord, the landlord must be reasonable in determining whether or not to give that consent.

 The standard ADLS lease allows for a change of use with a consent.  Many BOMA style leases do not, especially where the landlord closely manages tenant mixes. 

Each situation is different but the court has outlined some guidelines.

Guiding Principles

In deciding whether the landlord is acting reasonably the court has said these principles are relevant:

• The landlord can rely on any reason so long as it is reasonable.
• The landlord’s reason must actively have influenced their decision at the relevant time i.e. they cannot use good ideas thought up afterwards to justify their decision. 
• Only one of the reasons needs to be reasonable.
• The landlord can refuse consent if they reasonably believe the proposed use would be detrimental to their interests even if that is in respect of neighbouring property.
• The tenant is responsible for showing that the landlord’s decision is unreasonable.
• The context of the lease provision is important.

Debra Dorrington

Categories this article is in:

• Property Law
• Leases