Landlords and management companies will frequently faced with applications from leaseholders for consents, be that for alterations, assignments/sub-letting or other management issues such as pets. Often the covenants for consent in the lease will be ‘qualified’ covenants, meaning that the landlord or management company cannot unreasonably withhold consent.  The case of Victory Place Management Company Limited v Kuehn (2018), a case that may already be familiar to some, considered how this decision making process should be approached.

The Facts

Victory Place Management Company Limited (VPMC) operated a strict ‘no dogs’ policy in line with the opinions of the majority of the leaseholders in the 146 flat development, in the absence of special circumstances. The leases of the flats also contained a ‘no pets’ policy unless consent has been granted in writing by VPMC. Mr and Mrs Kuehn purchased the flat and were aware of the requirement for consent to be granted to enable them to have their dog, Vinnie (a Yorkshire/Maltese terrier), with them in the flat. VPMC rejected the request for consent for Vinnie to stay and, subsequently, obtained an injunction requiring Mr and Mrs Kuehn to remove Vinnie from the property.

The Issues

In granting the injunction, the Court had to consider if the decision not to grant consent was ‘Wednesbury unreasonable’. But what are the Wednesbury principles?

1. Were factors, that ought not to have been taken into account, taken into consideration during the decision making process? 

2. Were factors, that ought to have been taken into account, not taken into consideration during the decision making process? 

3. Was the decision so unreasonable that no reasonable body would ever consider imposing it?

The Court took the view that these principles must be taken into consideration when making decisions regarding consent and will in fact be implied in leasehold covenants. The Court therefore made the following decision:

1. The Wednesbury principles applied in that VPMC was required to take relevant matters into account and to refrain from taking irrelevant matters into account. 

2. VPMC’s policy did not violate these principles. The no pets policy was capable of being rationally justified. 

3. The Wednesbury principles were not violated by the stance taken by VPMC, as VPMC was willing to consider exceptional circumstances such as a medical requirement. Mr and Mrs Kuehn provided no such information or evidence to consider circumstances as exceptional. 

4. The policy was clear and Mr and Mrs Kuehn were aware of it prior to moving in.

The Appeal

Mr and Mrs Kuehn appealed the decision, arguing that the decision to refuse consent had been made prior to any formal application for consent being made to VPMC. The question was whether VPMC had acted unreasonably.

The Judge was not convinced by Mr and Mrs Kuehn’s arguments. They had been made aware on two previous occasions of the stance on pets and the requirement for special circumstances. VPMC was held to have acted reasonably in taking the views of the majority of leaseholders in the building into account, namely, that pets should be prohibited, when making their decision. Mr and Mrs Kuehn failed to provide evidence to sway VPMC’s decision on the basis of special circumstances.

The Judge found that the stance taken by VPMC was not an absolute prohibition against pets, but a general consensus where exceptions could be made where reasonable evidence is provided to justify such an exception being made. This decision was not predetermined; rather a proper exercise in VPMC’s discretion.

Conclusion

Landlords and management companies need to ensure that, when applications for consent are being made, their decision is made on a case by case basis. The covenants in the lease must be considered and only facts relevant to the request for consent itself must be taken into consideration. A blanket policy is unlikely to be reasonable, without being objectively justified and some element of flexibility or discretion permitted. 

It can be a difficult line to walk at times. Landlords and management companies must show that their discretion has been exercised reasonably and that the outcome of the decision making process was also reasonable. 

As always, if any such decision is required and any uncertainty or concern exists in the potential outcome, then we would be happy to assist and advise accordingly.

We hope that this legal update has been useful and informative, then please do not hesitate to contact at info@kdllaw.com or call us on 01435 897297.

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