Deed of Assignment of Lease.

Landlord consent and the grounds for withholding it

Most leases require landlord consent to assignment, and where the retail Acts apply, a landlord generally cannot unreasonably withhold consent and must respond within a defined period once given reasonable information about the incoming tenant, including their financial standing and business experience. Common legitimate grounds for refusal include the incoming tenant's inability to meet the financial obligations of the lease or lacking the retail experience to run the type of business contemplated by the permitted use. We prepare the consent request package to pre-empt objections — financials, references, and a business plan where the trade differs from the outgoing tenant's — so consent isn't delayed at the worst possible point in a sale timetable.

Conditions landlords commonly attach to consent

Landlords frequently use an assignment as an opportunity to reset terms — requiring a new bank guarantee from the incoming tenant, a guarantee from the incoming tenant's directors, updated insurance certificates, or even a variation to rent or outgoings terms as a condition of consent. Some of these conditions are legitimate protections for the landlord; others go beyond what the lease or the retail Act actually permits as a condition of consent. We review what's being asked for against what the lease allows before the outgoing tenant agrees to conditions that delay or complicate their exit.

Release of the outgoing tenant

The deed needs to expressly release the outgoing tenant from liability for breaches occurring after the assignment date, and in NSW, section 41 of the Retail Leases Act automatically limits an assigning tenant's liability once specific disclosure has been given to the incoming tenant and the assignment properly effected — but this statutory protection has procedural preconditions that are easy to miss. Where the retail Act doesn't apply, the release depends entirely on what the deed says, so we make sure it's an unambiguous release rather than a document that's silent and leaves the outgoing tenant exposed to a claim years later if the incoming tenant defaults.

Apportionment and settlement adjustments

The deed also needs to deal with the practical handover — apportionment of rent, outgoings, security bonds and bank guarantee substitution as at the assignment date, plus confirmation of who holds the security deposit going forward. We coordinate this with the business sale settlement so the lease assignment and the sale completion happen in the right order and on the same effective date, avoiding a gap where neither party clearly holds the tenancy.

What the fixed fee covers

• Review of the existing lease's assignment and consent provisions
• Preparation of the landlord consent request package
• Drafting of the deed of assignment, including release of the outgoing tenant
• Review of conditions the landlord attaches to consent
• Coordination of settlement timing with the underlying business sale
• Advice on bank guarantee and security bond substitution

Mistakes we see

• Completing a business sale before the lease assignment and landlord consent are finalised
• Assuming the outgoing tenant is automatically released once the incoming tenant takes occupation
• Accepting landlord conditions that exceed what the lease or retail Act allows
• Failing to update the bank guarantee, leaving the outgoing tenant's guarantee still in place
• Not obtaining director guarantees from the incoming tenant where the lease requires them

Who this is for

• Businesses selling a leased premises business as a going concern
• Purchasers taking over an existing lease rather than negotiating a new one
• Landlords managing a change of tenant mid-term
• Franchisees transferring a franchised outlet to a new operator

Frequently asked questions

Can a landlord refuse to consent to an assignment?

Yes, but under the retail Acts and most standard lease clauses, consent can't be unreasonably withheld. Legitimate grounds usually relate to the incoming tenant's financial capacity or business experience, not simply the landlord preferring to negotiate a fresh lease at a higher rent.

Am I still liable for the lease after I sell my business?

Only if the assignment and release aren't properly documented. Once a deed of assignment with an effective release clause is executed (and, in NSW, the retail Act's disclosure preconditions are met), the outgoing tenant is generally released from liability for post-assignment breaches.

Does my bank guarantee get returned automatically on assignment?

No — it needs to be expressly dealt with in the deed, usually by the incoming tenant providing a replacement guarantee before the landlord releases the outgoing tenant's guarantee. Without this, the outgoing tenant's guarantee can remain callable.

How long does landlord consent usually take?

Where the retail Act applies, the landlord must generally respond within a reasonable period after receiving the request and reasonably requested supporting information; delays often occur because the initial consent request package was incomplete rather than because of any real objection.

Can the landlord require a new lease instead of an assignment?

Not if the existing lease gives a right to assign with consent — a landlord can't simply insist on a fresh lease to reset terms, though they can lawfully require conditions like an updated guarantee as part of consenting to the assignment.