Assignment of lease

An assignment of lease occurs when a tenant wishes to transfer a commercial lease to another party before the end of the lease term.

Learn more Get in touch

Information about lease assignments

This is usually because the tenant is selling their business, or the tenant wishes to exit the lease and has found another party who will take on the already existing lease instead of entering into a new lease with the landlord.

Before a lease can be assigned, the existing lease document must be examined to identify if the lease is able to be assigned and the conditions under which the landlord will give their consent for the assignment to take place. Commercial leases often include a clause stating that the landlord cannot ‘unreasonably withhold’ consent for the assignment to occur. After this examination has occurred, the assignee (the new tenant) will contact the landlord and provide their financial information.

Generally, a commercial lease will contain a provision relating to the notice required to be given to the landlord when assigning the lease. If this notice is not given, or the existing tenant does not seek the consent of the landlord, the existing tenant may be in breach of their lease and it may be terminated.

When selling a business, an assignment of lease can be beneficial as it allows for continuity of the business premises and reduces fit-out costs. In addition, the business will stay recognisable to customers even if the management has changed.

Get in touch

Fill in the form below and one of our team will be in touch. You can also phone 1300 149 140 during standard business hours.

  • This field is for validation purposes and should be left unchanged.

Related Legal Insights

Self Managed Super Funds – Buying Property

Introduction Since 2007, self-managed super funds (SMSF) have been permitted to borrow money to invest in all types of real property including residential property, commercial property and industrial property. Prior to 2007, SMSFs could purchase property but were not permitted to borrow money to buy a property that the fund...

Read more
Options to renew in commercial leases – don’t get caught out!

Option clause is a term in a commercial lease An option clause is a term in a commercial lease that allows a tenant to renew their lease at the end of the original lease period, if they meet certain conditions. Landlords are not obliged to offer a renewal option. However,...

Read more
Retail Leasing Disclosure Obligations

When leasing commercial property, it is important for tenants and landlords to understand the relationship they are entering and the rights and obligations they have. In New South Wales, retail leases are regulated by the Retail Leases Act 1994 (NSW) (the ‘Act’). A commercial lease is classified as a ‘retail...

Read more
Commercial Leasing and COVID-19

Commercial Leasing and COVID-19 Mandatory Code of Conduct released The economic impact of COVID-19 on business generally, and commercial leasing arrangements has been the focus of many landlords, tenants and governments. On 7 April 2020, the Federal Government released its much-anticipated Mandatory Code of Conduct – SME Commercial Leasing Principles...

Read more
The financial risk in giving personal guarantees in leases

The financial risk in giving personal guarantees in leases If you are a director of a company entering a commercial or retail lease, a landlord will likely require you to give a personal guarantee for the company’s obligations under the lease. In such cases, directors should fully comprehend the extent...

Read more
What is an Agreement to Lease?

What is an Agreement to Lease? When renting business related property it is important for both landlords and tenants to understand the relationship they are entering into and the rights and obligations that they each have, the document that governs this relationship is usually a Commercial Lease. A Commercial Lease...

Read more
Commercial leases – Responsibility for repairs and maintenance

Commercial leases – Responsibility for repairs and maintenance A commercial lease is a legally binding contract that gives a tenant certain rights over a property for a set period of time subject to the terms and conditions set out in the lease. A commercial lease is used when leasing property...

Read more
Understanding a Commercial Lease

What is a commercial lease? When renting business related property, it is important for both landlords and tenants to understand the relationship they are entering into and the rights and obligations that they each have, the document that governs this relationship is usually a commercial lease. So, what is a...

Read more