The case involved a 99-year lease. T exchanged contracts with the purchaser, but that was conditional on L consenting to the transfer, with the purchaser agreeing not to object to any reasonable requirements of L. Whereas T had never provided a guarantor, L decided that it now wanted a guarantor. This was partly because the purchaser was a dormant company, owned by an individual; accordingly, L wanted a personal guarantee from that individual. He was prepared to give a guarantee but a dispute arose over the terms on which he could be released from that guarantee on any future transfer of the lease; after negotiation, L agreed that the guarantor would be released from the guarantee if ‘reasonable alternative security’ was provided on any subsequent assignment of the lease. The purchaser company said this was unreasonable and accordingly sought to withdraw from the transaction and recover its deposit. Its argument was that, by asking for such a guarantee, L was imposing a condition that would improve its own position (ie L was using the consent to assignment to engineer a situation in which he would have greater security than would otherwise have been the case). However, the court disagreed. The guarantor was not being asked to guarantee any satisfactory future T, but only if the future T was unsatisfactory. Accordingly, the requirement was reasonable and did not secure any advantage for L. The end result, therefore, was that the purchaser company was wrong to refuse to complete (and was not entitled to recover its deposit).

Needless to say, the case decides nothing new, but it does illustrate how the consent provisions can work. Plus, of course, one wonders whether a declining property market had anything to do with the purchasing company’s reluctance to proceed! Landlord Protect v St Anselm [2008] EWHC 1582 (Ch).© Practical Lawyer