High Court decision on failure to register assignment of lease – beware!

The High Court held that, on the construction of the terms of a sublease, a tenant required the consent of the immediate landlord to assign its leasehold interest. Since the tenant had not “served” written notice (for consent to assign) on its landlord, section 1(3) of the Landlord and Tenant Act 1988 did not apply and the landlord was not under a duty to give consent or reasons for refusing consent within a reasonable time.

In addition, failure to register the assignment of the leasehold interest (in breach of covenant) meant that the tenant remained bound by the tenant covenants in the sublease. As such, the tenant was still the current tenant not a “former tenant” for the purposes of a section 17 notice and its liability for rent arrears was not limited to the figure set out in the section 17 notice. (E.ON UK plc v Gilesports Ltd [2012] EWHC 2172 (Ch).)