Alienation Covenant

An alienation covenant pertains to the transfer of property ownership from one entity to another. Typically found within lease agreements, it dictates whether a tenant has the right to “alienate” the land, which encompasses actions such as:

1. Assigning the lease to a third party.
2. Subletting or underletting the property.
3. Sharing occupancy of the premises.

The covenant may either permit, prohibit, or allow alienation under specific conditions.

As per the Landlord and Tenant Act 1927, if the covenant stipulates that the tenant cannot transfer the property without obtaining consent, the landlord is obligated to provide consent reasonably and without undue delay.

A lease covenant addresses whether the tenant has the right to alienate the property, meaning if there’s a complete ban or limitation on the tenant’s ability to mortgage, assign, sublet, or transfer possession of the leased premises. In cases where the covenant states that the tenant cannot transfer, sublease, mortgage, or relinquish possession without the landlord’s approval, it’s understood that the landlord’s consent cannot be arbitrarily denied, as per Section 19 of the Landlord and Tenant Act 1927.