Landy Palmer & Ors v The Council of the City of Plymouth & Anor

Section 144 of the Law of Property Act 1925 and section 19 of the Landlord and Tenant Act 1927 can operate together. Section 144 addresses whether a lease expressly permits a premium for consent to alienation. Section 19 imposes a reasonableness requirement on restraints on alienation. The later provision does not impliedly repeal the earlier provision because no inescapable inconsistency exists. However, the statutory protection in section 19(1A) for agreed conditions does not apply to a “residential lease” within section 19(1E). A holiday chalet may be let mainly as a single private residence despite limited short-term holiday subletting and a period when occupation is prohibited. Whether a future premium condition is unreasonable depends on the circumstances of the individual assignment and cannot be decided hypothetically.

The claimants were tenants under identical 21-year leases granted in 2022 by the defendant local authorities for plots at Whitsand Bay containing recreational chalets. The leases permitted assignment only with consent and included a clause allowing consent to be conditional on payment of 75 per cent of the higher of the sale price or market value on the first assignment, and 20 per cent on later assignments.

The claimants sought declarations that the clause was void and that the defendants could not require premiums on assignment. The central issues were the interaction between sections 144 and 19 of the Law of Property Act 1925 and the Landlord and Tenant Act 1927, whether the leases were “residential leases”, and whether the court could determine the reasonableness of a future premium condition without an actual assignment.

1. Hypothetical relief. The court could determine the present legal status of clause 3.9.4 because there was a real dispute about the parties’ contractual rights. It could not determine in the abstract whether a premium would be unreasonable in a future assignment, since no assignment had occurred and the relevant circumstances were unknown.
2. Interaction of sections 144 and 19. Section 144 is a specific provision concerning premiums for consent to alienation. Section 19 is a general provision concerning restraints on alienation and imports a reasonableness requirement. The provisions were capable of operating together, so the high threshold for implied repeal was not met. Section 144 applied in principle, but its implied prohibition on a premium was displaced by the express term in clause 3.9.4. Section 19 also applied to the premium provisions.
3. Residential leases. The leases included the chalets as fixtures. The chalets were buildings let as single household units and mainly as private residences. The prohibition on use as an only or main residence did not prevent occupation as a residence. Express permission for limited holiday lettings, and the annual one-month closure period, did not alter the conclusion that the leases were mainly for a single private residence.
4. Because the leases were residential leases under section 19(1E), the agreed conditions did not obtain the protection of section 19(1A). The defendants therefore could not rely on clause 3.9.4 alone to establish that a premium condition was reasonable.
5. The evidence and argument were insufficient to decide whether any future premium condition would constitute unreasonable withholding of consent. Both declarations were dismissed. The judge requested a draft minute of order.