Retail leases: when the landlord can refuse
Under a retail lease, the landlord may withhold consent to an assignment only if:
- the buyer proposes to use the premises for a purpose the lease does not permit;
- the landlord considers that the buyer does not have sufficient financial resources or business experience to meet the tenant’s obligations;
- the tenant has not complied with the reasonable assignment provisions of the lease; or
- for an ongoing business, the tenant has not given the buyer the business’s records for the previous 3 years, or for the shorter time it has traded.
The steps
- Disclosure to the buyer. Before asking for consent, give the buyer a copy of the landlord’s disclosure statement and details of any changes. You may ask the landlord for a current statement, and if the landlord does not provide one within 14 days, you are excused from this step.
- Assignment disclosure statement. If the business will continue, give the landlord and the buyer an assignment disclosure statement in the prescribed form (Schedule 4 to the Retail Leases Regulations 2023 (Vic)).
- Written request. Ask the landlord for consent in writing, with the information the landlord reasonably needs about the buyer.
- The 28-day period. If you have complied and the landlord gives no written decision within 28 days after the request, the landlord is taken to have consented.
Getting released from the lease
If you gave the landlord and the buyer an assignment disclosure statement, and it was not false, misleading or materially incomplete, you and your guarantors are released from liability for the buyer’s defaults after the assignment. Without that step, you may remain liable under the lease even after you have sold the business.
The landlord's costs
A retail landlord cannot charge the tenant its legal costs of preparing the lease, but it can recover its reasonable costs connected with an assignment, such as investigating the buyer and obtaining consents.
Leases outside the Retail Leases Act
Under other leases, the Property Law Act 1958 (Vic) provides that the landlord’s consent to an assignment is not to be unreasonably withheld, unless the lease expressly provides otherwise, and no fine is payable for consent. The lease itself often sets further conditions, and release of the outgoing tenant and its guarantors is not automatic, so it needs to be negotiated.
If you are buying
Before you commit to buying a business, check the lease: the term remaining and any options, the rent reviews ahead, the outgoings, the make-good obligation you will inherit, and whether the permitted use covers your plans. Make the contract conditional on the landlord’s consent.
How we help
- Sellers: the disclosure steps, the consent request, the deed of assignment and the release.
- Buyers: reviewing the lease and making the purchase conditional on consent.
- Landlords: assessing a request within the 28 days, and the deed of assignment.
- Coordinating the lease with the business sale contract, so settlement is not held up.
Law referred to
- Retail Leases Act 2003 (Vic) ss 51, 60, 61 and 62 to 63.
- Retail Leases Regulations 2023 (Vic) reg 12, Schedule 4.
- Property Law Act 1958 (Vic) s 144.
This page is general information about Victorian law as at October 2026. It is not legal advice about your lease.
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