Assigning a commercial lease: can your landlord stop the sale?
A landlord can sometimes refuse consent to assigning a commercial lease, which can delay or stop a business sale. The permitted grounds, response deadline and your liability after transfer depend on the state, lease type and documents. Get consent and any release confirmed before settlement; selling the business alone does not end your lease obligations.
For a café, shop or salon, this contract review belongs near the start of the sale. Read the lease, guarantee and proposed assignment deed together. They are business contracts that can affect both the sale date and what you owe afterwards.
Retail lease or not: which rules apply to your lease
There is no national retail leases law. Each state and territory has its own, and the assignment rules sit in it:
NSW: Retail Leases Act 1994 (NSW)
Victoria: Retail Leases Act 2003 (Vic)
Queensland: Retail Shop Leases Act 1994 (Qld)
South Australia: Retail and Commercial Leases Act 1995 (SA)
Western Australia: Commercial Tenancy (Retail Shops) Agreements Act 1985 (WA)
Tasmania: Fair Trading (Code of Practice for Retail Tenancies) Regulations 1998 (Tas)
ACT: Leases (Commercial and Retail) Act 2001 (ACT)
NT: Business Tenancies (Fair Dealings) Act 2003 (NT)
Tasmania’s Retail Leases Act 2022 has partly commenced. Consumer Affairs Tasmania identifies sections 2 and 88 as commenced; section 88 continues the 1998 Code. The remaining substantive regime is not yet operating.
Coverage is not identical across jurisdictions. Premises use, size, rent, the tenant and statutory exclusions can all matter. Confirm which regime applies instead of assuming every commercial lease has retail-lease protection.
For premises outside a retail regime, read the lease alongside applicable property law. It is wrong to assume every clause operates exactly as written. For example, Queensland’s Property Law Act consent process has applied since 1 August 2025, including to earlier leases. It requires a response within one month after necessary details are supplied and prevents unreasonable withholding of consent. Delay can lead to a court application; it is not automatic approval.
Our guide to what to check before signing a commercial lease shows how to tell which kind you hold.
When a landlord can refuse consent to assigning a commercial lease
Assigning means transferring the lease to someone else. You, the assignor, ask the landlord to consent to the buyer, the assignee, taking it over.
Common issues the landlord may assess include:
the buyer wants to use the premises for something the lease doesn't allow
the buyer doesn't have the money to meet the lease
the buyer doesn't have the skills or experience to run the business
you haven't followed the assignment process
The statutory grounds vary. In Victoria, for example, the official assignment guidance also identifies missing business records for the previous three years when a going business is sold. A single national list cannot replace the local test.
Check any fee demanded for consent. Some laws prohibit a premium or key money while allowing reasonable legal or processing costs. Ask what the charge covers and for supporting invoices before agreeing to it.
Also check how much lease term remains. A buyer may need an option exercised or a new lease rather than a transfer of a short or periodic tenancy.
How each state handles a commercial lease transfer
This is a starting comparison for leases covered by the relevant regime. A deadline does not make an incomplete application valid, and a release from the buyer’s future defaults does not necessarily erase your own existing debts.
| State or territory | Consent timing and procedure | Continuing-liability check |
|---|---|---|
| NSW | Generally 28 days after required information is supplied. Deemed consent depends on compliance. | Give the valid assignor’s statement to landlord and buyer at least seven clear days before assignment and satisfy the applicable release conditions. |
| Victoria | 28 days from the request, with the tenant’s obligations completed, for deemed consent. | For a continuing business, give the required statement to both parties. False, misleading or materially incomplete information can defeat protection from the buyer’s obligations. |
| Queensland | The Property Law Act process generally allows one month after full details; follow the retail disclosure process too. | Section 50A protects the assignor and guarantor from liability resulting from the assignee’s default if s 22B or the relevant order is complied with and disclosure is not defective. |
| South Australia | 42 days after the request, subject to the required information and disclosure steps. | Section 45A ends future exposure at the earliest of two years, lease expiry, or commencement of a renewal or extension. For an ongoing business, correct disclosure and timing matter. Earlier accrued liabilities remain. |
| Western Australia | Section 10 provides a 28-day written-request process and limits refusal to reasonable grounds. | Section 10 invalidates specified clauses imposing liability for the incoming tenant’s payments. Check the lease date, transitional rules and deed; obtain advice on any remaining liability rather than assuming a complete release. |
| Tasmania | Under Code cl 28, 14 days to request information, then 21 days after all required information to decide. No objection in that period means approval. | No general release simply because a transfer occurs. Clause 28(12) addresses later changes to non-rent lease terms without the original tenant’s and guarantor’s agreement. |
| ACT | Generally 28 days, or 21 days after further information, subject to agreed extensions. Deemed consent also depends on head-lessor or mortgagee refusal. | Section 103 releases the tenant and guarantor from further obligations where assignment occurs under Part 11. |
| Northern Territory | 42 days from the request for deemed consent if the specified disclosure and information requirements are met. | Section 58 protects a qualifying ongoing-business assignor and guarantor from amounts payable by the assignee where the required statement is supplied and is not false, misleading or materially incomplete. |
In Queensland, the outgoing tenant generally gives the buyer its disclosure statement and current lease at least seven days before the earlier of the sale agreement or consent request. Section 22B includes a waiver process and requires a copy to the landlord when consent is requested. The buyer and landlord also have their own disclosure obligations.
Do not settle purely because a date in this table has passed. Have your adviser confirm the applicable process, service dates, documents and any other required consent.
The disclosure step that decides whether you walk away
An assignor’s disclosure statement records information the outgoing tenant must give about the lease or business. Several regimes make it central to protection from future liability. The required form, recipient and timing differ.
Prepare the statement from the signed lease, variations, notices, rent concessions and trading records. A document sent late or containing materially wrong information may not provide the protection you expect. Keep evidence of what each party received and when.
Staying liable after the sale: the lease and your personal guarantee
Leases to a company often come with a personal guarantee from the director. That promise is yours, not the company's. Selling the business doesn't end it unless the lease, the deed or the Act says so.
Keep the company’s lease liability separate from the director’s guarantee. The same statutory conditions may protect both, but the scope is jurisdiction-specific. Ask the adviser to confirm exactly which future liabilities end, which existing liabilities survive, and whether a separate release is needed.
Read the deed of assignment before you sign it. Some deeds carry a "no release" clause, saying you and your guarantor stay liable. In NSW, the Commissioner says such a clause loses its force under section 41A once the process is followed. Without that, it may still bind you.
Check the other guarantees you signed too. A release from the lease does not release a guarantee attached to a supplier agreement; see a director’s guarantee for a supplier.
Worked example: what four months of unpaid rent can cost
The numbers here are illustrative.
Mia's company runs a café on a 5-year retail lease with 3 years left. Rent is $6,500 a month. Mia signed a personal guarantee. She sells the business, and the landlord consents to the assignment.
The buyer trades for 14 months, then stops paying. 4 months' rent goes unpaid before the landlord re-lets the shop. That's 4 × $6,500 = $26,000 owing.
| Position after the transfer | What the $26,000 means for Mia |
|---|---|
| Victoria: qualifying continuing-business assignment with the required valid disclosure | The statutory protection can prevent recovery from Mia’s company and her guarantee for the buyer’s unpaid rent. |
| Victoria: required disclosure omitted | That protection may be unavailable. The lease and guarantee must be checked for continuing liability. |
| South Australia: valid disclosure and default starts in month 14, before any earlier expiry, renewal or extension | The liability cutoff has not arrived. The company and guarantor may remain exposed under their documents. |
| South Australia: only new rent defaults from month 26, with the release conditions satisfied | The two-year cutoff protects against those later obligations; earlier accrued debts are not wiped away. |
The $26,000 is rent arithmetic, not a statutory cap or a prediction of a judgment. Outgoings, interest, legal costs, security and the landlord’s recoveries can change the actual amount. Mia’s next step is to have the assignment and release checked before settlement, rather than relying on the sale contract alone.
Contract negotiation: an assignment clause worth discussing
Review the assignment clause before signing or at renewal. The following wording is an illustrative negotiation request, not a complete deed or a statement of minimum legal rights. The 28-day deadline and $1,500 cost cap are proposed commercial terms. Have a lawyer adapt them to the governing law and the lease.
The version many leases carry:
Assignment. The Tenant must not assign this lease without the Landlord's prior written consent, which the Landlord may give or withhold in its absolute discretion. As a condition of consent, the Tenant must pay the Landlord's costs and an administration fee of $5,000. The Tenant and the Guarantor remain liable under this lease for the full term despite any assignment.
Applicable law may override the discretion, fee or continuing-liability terms. That can include property law outside a retail regime. Do not assume the printed wording is enforceable just because it appears in the lease.
The version to ask for:
Assignment. The Tenant may assign this lease with the Landlord's written consent. The Landlord must not unreasonably withhold consent. It may refuse only if the assignee proposes a use this lease does not permit, or cannot show the financial resources or business experience to meet this lease.
Subject to any mandatory process or shorter statutory period, the Landlord will give its decision and any refusal reasons in writing within 28 days after receiving a complete written request and the reasonably required assignee information. Any contractual deemed-consent mechanism must be expressly agreed and consistent with applicable law and required third-party consents.
The Tenant will pay the Landlord's reasonable legal costs of the consent, up to $1,500 plus GST, once substantiated in writing.
On completion of the assignment, the Landlord releases the Tenant and the Guarantor from liability for obligations attributable to the period after that date, including the assignee’s subsequent defaults. This does not release liabilities attributable to the period before assignment. Mandatory statutory protections are preserved.
The landlord may ask for replacement security. If that is agreed, the deed must expressly link it to the outgoing parties’ release; a new guarantee alone should not be treated as evidence that the old one has ended.
If the landlord stalls or says no
Check the clock. Put every request in writing and keep proof of delivery.
Ask for reasons in writing. In South Australia, a landlord who refuses must give you the grounds in writing.
Build the buyer's file. Financial statements, references and experience answer the usual grounds before they're raised.
Make the sale conditional on consent. Our guide to buying a business shows the same step from the buyer's side.
Contact the relevant small business commissioner or tenancy regulator for assistance; get legal advice promptly if settlement or a dispute deadline is close.
After completion, good contract management means storing the consent, signed deed, disclosure statements, releases and remaining deadlines together.
What's changing, and what isn't
Treasury’s retail leasing consultation sought views on simplifying differences between jurisdictions, including lease transfers, with submissions closing on 12 October 2026. That consultation does not itself change your lease rights. Check the law and any commencement or transition provisions that apply to your transaction.
What this doesn't cover
Share sales, where the company keeps the lease and nothing is assigned. Check whether your lease treats a change in shareholding as an assignment. Franchise sites, where the franchisor's consent is a second hurdle; see our franchise agreement checklist. Subleases, residential leases, and disputes already under way, which need a lawyer.
Reviewed 25 October 2026 against the official sources linked in the comparison and source notes. Coverage and procedures differ by jurisdiction.
Review the lease before you list the business. Contractam’s AI contract review can help you identify assignment, guarantee and release clauses to discuss with your adviser before the sale progresses.
Source notes
Official sources checked on 25 October 2026. The jurisdiction links in the comparison table are the main sources for consent procedures and continuing liability.
NSW: Small Business Commissioner guidance on transfers and section 41A/no-release clauses, linked above.
Victoria: Victorian Small Business Commission guidance on assignment, consent, business records and disclosure, linked above.
Queensland: Small Business Commissioner guidance on the Property Law Act process, and Retail Shop Leases Act 1994, particularly ss 22B and 50A, linked above.
South Australia: Retail and Commercial Leases Act 1995, particularly ss 43–45A, linked above.
Western Australia: Commercial Tenancy (Retail Shops) Agreements Act 1985, particularly s 10 and applicable transitional provisions, linked above.
Tasmania: Consumer Affairs Tasmania commencement guidance and the continuing 1998 Code, particularly cl 28, linked above.
ACT: Leases (Commercial and Retail) Act 2001, Part 11, including s 103, linked above.
Northern Territory: Business Tenancies (Fair Dealings) Act 2003, particularly ss 55–58, linked above.
Treasury's national retail-leasing consultation announcement, linked above: policy consultation, not a replacement for state and territory law.
Contractam provides contract review and information, not legal advice. For advice specific to your situation, consult a qualified Australian lawyer. Contractam reviews contracts under Australian law only. See our disclaimer.