Circumstances may arise when a tenant seeks to sub-let or assign their lease over retail premises. There are strict guidelines on method of seeking consent and whether the landlord is permitted to withhold their consent.
If your tenant is seeking consent to sub-let or assign their retail lease, remember:
- Your tenant must comply with the legislation – including seeking consent in writing;
- Failure to respond may imply landlord consent;
- Be mindful that the landlord must respond within a certain timeframe;
- Check the terms of your lease whether ‘absolute discretion’ permitted;
- Generally cannot unreasonably withhold consent
- Consult the relevant legislation in your jurisdiction as to whether you can withhold consent and under what circumstances; and
- If you are unsure about consenting to sub-letting or assigning a lease over your retail premises, consult independent legal advice.
These are the details specific to the Leases (Commercial and Retail) Act 2001 in the ACT
Disclosure Details
Landlord entitled to seek further information on financial standing, relevant business skills of tenant, certificate of occupancy, proposed use of premises, references.
Landlord Response Time
28 days
Circumstances Landlord consent may be withheld
- Proposed use not permitted
- Assignee does not have financial resources to run business
- Assignee doesn’t have adequate business skills
- Cannot produce current certificate of occupancy
- Proposed business incompatible with other tenants
- Tenant failed to rectify lease breach.
No Response Implies Consent?
Yes
Absolute Discretion permitted?
No
Other
Tenant can ask landlord for copy of disclosure statement. Required to comply within 21 days.
Landlord bears burden to prove reasonableness consent refusal.
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