Assigning a commercial lease
Lease assignments on sale of business are common but procedurally detailed. Retail leases have additional disclosure and consent requirements under the Retail Leases Act 1994 (NSW), and assignor release is not automatic.
This is an 8-step workflow for assigning a commercial lease in NSW, including the lessor consent process and any retail leases disclosure obligations.
Before you start
- Copy of the lease and any variations obtained
- Nature of the business sale confirmed
- Assignee financial information available for the lessor
- Retail lease status checked
The workflow
Review assignment clause
Review the assignment clause in the lease — conditions for consent, information to be provided, and whether the lessor's consent can be unreasonably withheld.
Confirm retail lease status
Confirm whether the lease is a retail lease under the Retail Leases Act 1994 (NSW). Retail leases have additional statutory assignment procedures under s 39-41.
Prepare assignor disclosure
For retail leases, prepare the assignor's disclosure statement to the assignee at least seven days before the assignment.
Request lessor consent
Request lessor consent with the required information — assignee details, financials, proposed use — and offer the lessor's reasonable legal and investigation costs.
Negotiate consent terms
Negotiate the consent deed terms — security bond, bank guarantee, guarantors, and release of the assignor. Address any requested variations.
Draft the deed of assignment
Draft or review the tripartite deed of assignment and consent, including release of assignor where agreed and assignee covenants to perform the lease.
Settle in parallel with business sale
Settle the assignment in parallel with the business sale. Coordinate the handover of security, keys, and any ingoing payments.
Post-settlement registration and records
Register the assignment with LRS where required (long leases) and update the lease register, certificate of title search, and insurance records.
What you will have at the end
An executed deed of assignment and consent that transfers the tenant's interest in the lease, with any retail leases disclosure and lessor consent requirements satisfied.
Common issues
- Missing the s 41A retail disclosure window
- Assuming automatic assignor release
- Failing to transfer or replace security deposits and bank guarantees
- Not registering long-term lease assignments
- Conflating consent to assignment with consent to change of use
Run this workflow on a real matter
Quillio drafts the disclosure statement, consent request, and deed of assignment, and flags Retail Leases Act deadlines. See /practice-areas/property-lawyers or start a free trial.
This workflow is a general guide for NSW. Retail and commercial leasing legislation differs across jurisdictions.
Try this workflow with Quillio.
Quillio can run this workflow on a real matter, with citations to current AU authority on every step. The free trial requires no credit card.
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