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Disputes over consent to assignment, sub-letting and change of use
In most cases, the issues of assignment and sub-letting are addressed in legally binding covenants contained within a commercial property lease. Any related applications made by tenants of properties that fall under the jurisdiction of the contract must comply with the terms of the lease.
Where a covenant is in place that requires the consent of the landlord before a tenant assigns or sub-lets the property, that consent should not be unreasonably withheld or delayed (usually a period of weeks rather than days is considered acceptable by the Courts for the landlord to respond with a decision). There may be instances where it is considered reasonable for a landlord to withhold consent and this will be determined only by the specific facts of each case.
If an application by a tenant to assign or sub-let a property is refused, the tenant has the right to go ahead with their proposed action if they believe that consent has been unreasonably withheld by the landlord. However, in doing so, the tenant runs the risk the risk of misinterpreting a legitimate refusal and the landlord may be in a position to seek damages, an injunction or forfeiture of the lease.
A safer option for the tenant in such circumstances would be to make an application to the Court for a declaration on the issue. The burden of proof lies with the tenant to prove that the landlord has acted unreasonably and, if successful, the landlord may be liable for damages for a breach of duty.
Change of use
Changing the use of a commercial property often requires a surprising amount of paperwork and a firm grasp of the legal factors involved in order to comply with planning requirements.
So, what steps should you take if you’ve acquired a commercial property and want to change the purpose for which it is used?
Under the planning system, all buildings, whether used for commercial or residential purposes, will have an existing lawful planning use. Commonly, such planning use will fall into various ‘classes’ defined in the in the Town and Country Planning (Use Classes) Order 1987.
Defined use classes within the Order include: A1 (standard shops); A2 (professional services); A3 (food and drink); A4 (public houses); B1 (offices); B2 (general industry); B8 (storage and distribution); and C3 (residential housing).
If the current planning use does not fall within any defined use class, then it is known as sui generis (which means it is of its own unique kind of use, e.g. retail warehouse clubs, car dealerships and hostels).
A use class can determine whether permitted development rights apply. A good understanding of use classes can help to navigate the system and simplify the process of changing the purpose of a building without the need for a planning application.
A full list of the defined use classes can be found on the government’s planning portal. However, it may take some degree of investigation to determine exactly which use class (if any) a building falls into, especially if it has had a variety of uses over the years. It is then important to check your own records, including deeds, land registry records and other official documents to determine the current classification. The local council planning departments may also hold records concerning the classification of your building.
Our Planning team can assist in identifying the current planning use of your building and what permitted development rights are available. We can also assist you in making a planning application or prior approval notification for any proposed change of use.