The following Property guidance note provides comprehensive and up to date legal information covering:
The tenant’s ability to assign or underlet will depend on the form of covenant in the lease. It is important to properly analyse the covenant, to decide whether it restricts assignment or underletting, and if so, to what extent.
This is rare in modern leases, but some long residential leases may not impose any restriction on assignment or underletting beyond giving notice to the landlord. In the absence of any restriction, the tenant is free to assign or underlet as it pleases.
A covenant that prohibits entirely any assignment or underletting (as the case may be) is often described as an absolute covenant. There is no statutory modification of absolute covenants, so they constitute a complete bar. However, the covenant should still be analysed, to check precisely what is prohibited.
If there is an absolute covenant, the landlord has complete discretion about whether to grant consent and, if so, on what terms. The landlord should be aware, however, that granting licence to do something that is prohibited by the lease may put it in breach of any obligation in other leases to enforce that covenant.
Many covenants will consist of aspects of an absolute prohibition, together with qualified or fully qualified covenants (explained below). For example, there may be an absolute covenant against assignment
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