Assignment of Retail Shop Lease QLD

How assignment works under the Act

An assignment transfers the lease from the current tenant (the assignor) to a new tenant (the assignee). It usually happens when a business is sold. Most leases need the landlord’s consent.

Under the Act, the assignor must give the assignee an assignor disclosure statement in the approved form and a copy of the current lease. The deadline is at least 7 days before the earlier of signing the business sale contract or asking the landlord for consent. The assignor also passes on a copy of the landlord’s original disclosure statement. The landlord must give the assignee its own disclosure statement at least 7 days before the assignment.

Before the assignment, the incoming tenant must give the landlord a Form 11 financial advice report and a Form 12 legal advice report, unless an exception applies.

The assignor disclosure statement tells the incoming tenant about the lease and the shop from the outgoing tenant’s side, such as disputes, changes to the lease and any notices received. If you are the incoming tenant, we can review the lease before you commit.

Landlord consent

The outgoing tenant asks the landlord in writing for consent and gives it the information it reasonably needs about the incoming tenant. That is usually financial details, business experience and references.

Under section 142 of the Property Law Act 2023 (Qld), the landlord must not unreasonably withhold consent. If the landlord doesn’t answer within 1 month of getting the request and that information, or tries to impose unreasonable conditions, the Retail Shop Leases Act lets you treat it as a retail tenancy dispute. A complete request at the start usually helps avoid delays.

The landlord, the outgoing tenant and the incoming tenant then sign a deed of assignment and consent. New guarantors for the incoming tenant usually sign it too.

Release of the assignor and guarantors

If the outgoing tenant gave a complete and accurate assignor disclosure statement on time, the Act releases the outgoing tenant and its guarantors from liability for the incoming tenant’s defaults once the assignment is entered into. The release doesn’t cover the outgoing tenant’s own arrears or breaches from before the assignment.

If the process wasn’t followed, or the statement was defective, the release may not apply. You and your guarantors could then stay liable if the incoming tenant defaults.

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