Charging Leases – Five Top Tips For Landlords

Your Tenant contacts you for your consent to charge their leasehold interest in your property – what do you do?

Firstly, if the lease says nothing about it or expressly allows your Tenant to charge the premises without your consent as a whole or in parts, your consent is not required.

Secondly, check if the Tenant is requesting consent to charge the whole or part of the premises. The lease may allow charging of the whole but prohibit the charging of part.

Thirdly, check if the lease contains a covenant by the Tenant to pay your legal fees for dealing with an application for a licence to charge. If it does tell the Tenant that they are required to pay your fees and contact your solicitor to get an estimate for these. Your solicitor will ensure that these fees are secured by way of an undertaking from the Tenant’s solicitors, whether or not the Licence is eventually granted.

Fourthly, If the Tenant is allowed to charge with your consent there is an implied duty on your part not to unreasonably withhold the consent.

Finally, is the consent of any other party required? If the lease to the Tenant is an underlease and you have a leasehold interest in the premises then the consent of your Landlord will also be required. If you are have a mortgage on the premises, whether you are a Leaseholder or Freeholder then in all probability the mortgagee’s consent will be required.