Rescission—failure to obtain landlord’s consent
Rescission—failure to obtain landlord’s consent

The following Property guidance note provides comprehensive and up to date legal information covering:

  • Rescission—failure to obtain landlord’s consent
  • Standard Conditions of Sale
  • Standard Commercial Property Conditions (Second Edition)
  • Standard Commercial Property Conditions (Third Edition)
  • Consent in principle
  • Limited window

While this Practice Note primarily covers commercial property matters, it also touches on residential considerations.

Standard Conditions of Sale

Where:

  1. a contract for the sale of leasehold property incorporates the Standard Conditions of Sale (Fifth Edition): Encyclopaedia of Forms and Precedents [421] (SCs), and

  2. the lease requires the landlord’s consent to an assignment

The SCs set out an express right to rescind in certain circumstances.

SC 8.3.3 provides:

‘Unless he is in breach of his obligation under condition 8.3.2 [the seller’s obligation to apply for the consent], either party may rescind the contract by notice to the other party if three working days before completion date (or before a later date on which the parties have agreed to complete the contract):

(a) the consent has not been given, or

(b) the consent has been given subject to a condition to which a party reasonably objects. In that case, neither party is to be treated as in breach of contract and condition 7.1.2 applies [ie if either party rescinds in that context the buyer’s deposit must be returned with accrued interest].’

This leaves room for disagreement over the type of condition to which either party might reasonably object. The landlord's consent does not have to have been unreasonably withheld on the basis that the condition is outside the terms of the section 19(1A) of the Landlord

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