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I copy and pasted the following clause from the Offer to Lease, governed by the law of England and Wales, that a Landlord emailed me, for leasing their premise in England for my retail store.

No Objection To Title

  1. The Tenant must assume the Landlords' right to grant the tenancy; shall not require any evidence of the Landlords' title to the Premises; or raise any objection, requisition or enquiry in respect of it.
  1. What else are the worst that can happen to me, if I agree? I know Canadian law's different, but I found one pitfall in this PDF by Louis-Martin Dubé LL.B. from Université de Montréal (1985), Partner at McCarthy Tetrault, The Tenant, the Landlord and his Mortgage Lender: Is Three a Crowd?

As for the tenant, he will want to protect his right to occupy the leased premises and avoid any risk of termination of the lease should the landlord be in default with his lender.

  1. Isn't this clause too onerous? Isn't it unconscionable and unreasonable to require the Tenant to deliberately ignore any encumbrances on the Landlord's title?
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    Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer.
    – Community Bot
    Aug 30, 2021 at 11:23
  • I'm not sure I understood the point of this clause, since for £3, you can download the Land Registry record for the property, and see for yourself who owns the building (or if the property is a leasehold, you can see who the leaseholder is, and for another £3 who the freeholder is).
    – Steve Melnikoff
    Aug 30, 2021 at 19:11

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Isn't it unconscionable and unreasonable to require the Tenant to deliberately ignore any encumbrances on the Landlord's title?

No. It does not shock the conscience that a tenant might willfully decline to scrutinize the landlord's ability to perform the contract. The landlord is not forcing the tenant to enter the lease. Although it might be unwise for a tenant to agree to that sort of clauses and waivers, it would not be found "unreasonable" in a way that renders the lease --or these clauses-- null an void.

In the Restatement (Second) of Contracts at §154(a)-(b), this sort of clauses is known as bearing the risk of a mistake. The lease clearly (1) allocates to the tenant the risks ensuing from not knowing how reliable the landlord's position is, and (2) shifts to the tenant the burden of hedging himself against any contingencies in the event that the lender replaces the landlord in that lease.

Given the principle of freedom of contract, it is highly doubtful that English law provides the opposite of Restatement at §154 in a landlord-tenant context.

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  • Thanks. You answered my question 2. But did you answer my question 1?
    – user89
    Aug 31, 2021 at 1:08
  • @CMC.V "did you answer my question 1?" Not explicitly. Without knowing the particulars of the tenant's situation it is hard to outline what would be the worst possible scenario. But the sole risk of having to vacate the property on lender's whim suggests multiple types of losses the tenant would incur: the need to start to publicize the business's new location; a change of location will inconvenience & dissuade many customers; expensive attorney fees because of an eviction process, and so forth.
    – Iñaki Viggers
    Aug 31, 2021 at 9:33
  • OK. You wrote "lender's whim", but I didn't mention any lenders. 3. What lenders are you referring to? 4. Why would the Tenant need to "vacate the property on lender's whim"?
    – user89
    Sep 1, 2021 at 7:27
  • @CMC.V "I didn't mention any lenders." Now I realize that the phrase "should the landlord be in default with his lender" is from the article and not from clause 5. Regardless, the clause would prevent the tenant from corroborating the landlord's title to the premises. This means that if the landlord gets a mortgage, defaults on it, and the premises become lender's property, the lender can make whatever he wants with the premises. The lease is not binding on the lender, and thus the lender may anytime require the tenant to vacate the premises.
    – Iñaki Viggers
    Sep 1, 2021 at 9:10

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