Transfer of Lease
A transfer of lease, also known as an assignment of lease, transfers the lease from the outgoing tenant to the incoming (new) tenant.
The usual reasons for transferring a lease are as follows:
- You as the tenant have sold your business and as a condition of the sale, the premises need to be transferred to the new purchaser of the business;
- There is some other reason that you want to leave the premises – for example, your business could be growing or contracting and you have found another tenant to take over the lease.
As the outgoing tenant, you need to be sure that your liability is absolutely limited with respect to the new tenant. Better still, you may wish to have no ongoing liability at all. We have seen guarantees by outgoing tenants called in where the new tenant does not succeed and stops paying the rent on account of ongoing default by the tenant. This type of indemnity can be very costly is outside the control of the outgoing tenant.
Sometimes, landlords refuse to consent to the new tenant. Most leases will require the landlord to be “reasonable”, but landlords can still often refuse a new tenant. We can provide advice and assist existing tenants.
If you are an incoming tenant, it is wise to be sure that the lease you are getting is everything you need. It is not uncommon to negotiate varied terms with the landlord – such as more options for further terms. However, in softer markets, landlords are open to these types of variations.
Our lawyers regularly provide legal advice to outgoing tenants and incoming tenants in relation to all of the above matters. Our lawyers have extensive experience in drafting and negotiating commercial favourable terms for our clients. We work hard to ensure our client’s position is maximised at all times.
Speak to a lease lawyer today on 1300 907 335 to discuss your transfer of lease matter. Alternatively, please fill out the contact form on this page and we’ll respond to you promptly.
