A grants B a lease of a shop for 30 years on a lease which contains an absolute prohibition against subletting.
Despite the prohibition A grants B a licence to sublet to C for ten years with no requirement to contract out of statutory security of tenure. B sublets to C for ten years without contracting out. The ten years expires and C continues in occupation. The tenancy is continuing by virtue of Part II L&T 1954 and the head lease has 15 years left to run.
A is now putting pressure on B and C to agree a new sublease but wants a substantial premium to grant a licence to sublet. It seems to me that B and C can just sit tight. The tenancy is the tenancy consented to by A and the fact that the ten years has expired is of no consequence. A cannot insist on the grant of a new sublease.
What though would be the position if C requests a tenancy under section 26 L&T Act 1954 and there are no statutory grounds for opposing a renewal or B chooses in any event not to oppose the renewal? If it goes to court it seems that the court must order the grant of a new tenancy and that B must grant it even though his lease has an absolute prohibition against subletting. A whistles for his premium.
If it is indeed the case that B can be ordered to grant a new lease to C despite the absolute prohibition against subletting, does that justify B granting a new lease to C without obtaining consent?
Is it simply the case, if a landlord grants consent to sublet (whether the prohibition is absolute or qualified) and the sub-tenant has the benefit of Part II protection, that he cannot object to the grant of a new tenancy?