Selling or restructuring a Gold Coast business can depend on a signature the owner does not control: the landlord’s.
Commercial leases almost always require the landlord’s consent before a tenant can transfer the lease, and a refusal or delay can derail a business sale.
Since 1 August 2025, Queensland’s Property Law Act 2023 has provided a more structured process for obtaining landlord consent. The consent process applies to existing leases as well as new ones, making early advice from a Gold Coast commercial leasing lawyer worthwhile for business owners considering a sale or restructure.
What does assigning a commercial lease mean?
Assigning a commercial lease means transferring the tenant’s interest in the lease to another person or business. This usually occurs when a business is sold and the buyer wants to keep operating from the same premises.
Having commercial lease solicitors review the lease before committing to a sale can establish whether consent is required and what restrictions apply.
Can a landlord refuse consent to a commercial lease assignment?
Where a lease requires the landlord’s consent to an assignment, section 142 of the Property Law Act 2023 states that consent must not be unreasonably withheld if the lessee gives a proposal notice containing any information required by the lease and asking for consent. The parties cannot contract out of this protection.
However, the legislation does not necessarily override a lease clause that prohibits assignment altogether. A Gold Coast commercial leasing lawyer can check whether the lease permits assignment before a sale contract is signed.
What are reasonable grounds for refusing a lease assignment?
A landlord has a legitimate interest in ensuring that an incoming tenant can meet the lease obligations. Depending on the circumstances, reasonable grounds for refusal may include:
- Concerns about the proposed tenant’s financial capacity to pay rent and outgoings.
- Insufficient experience or qualifications to operate the proposed business.
- A proposed use of the premises that is inconsistent with the lease.
- Failure to provide information reasonably required to assess the assignment.
However, a landlord generally cannot refuse consent because they dislike the proposed buyer or want to use the assignment to negotiate more favourable lease terms. Property lawyers on the Gold Coast will typically weigh the landlord’s stated reasons against the lease terms.
What have Queensland courts said about unreasonable refusals?
In Cathmark Pty Ltd v Nethercott Constructions Pty Ltd [2011] QSC 86, the Queensland Supreme Court considered the proposed sale of a Magnetic Island resort business that depended on the landlord consenting to the lease assignment.
While the landlord raised concerns about the incoming operators’ experience and financial position, the court found that consent had been unreasonably withheld. The landlord had refused consent less than 24 hours after requesting further information, and the court found no reason to doubt the buyers’ ability to operate the business.
Although decided under the previous legislation, the case shows the importance of a fair, informed decision.
How does the landlord consent process work?
According to the Queensland Small Business Commissioner (QSBC), the section 142 process applies to leases signed before and after 1 August 2025. The key steps are:
1. Submit a proposal notice
The tenant provides the landlord with particulars of the proposed assignment.
2. Provide additional information if requested
The landlord may request further details needed to assess the proposal.
3. Receive a decision notice
The landlord must respond within one month of receiving full particulars, unless the parties agree to extend the period. The notice must explain any refusal or conditions imposed.
4. Challenge a refusal, condition or failure to respond
The tenant may apply to the court if they believe consent has been unreasonably withheld, a condition is unreasonable, unnecessary or onerous, or the landlord fails to issue a decision notice within the required period.
The one-month period begins when the landlord receives full particulars, not when the tenant first makes contact. Engaging solicitors for commercial leases to prepare a complete application can help avoid unnecessary delays.
What information can a landlord request?
Landlords may reasonably request information about the proposed incoming tenant, such as:
- financial statements
- business experience
- references
- details of the intended business operations
- information about proposed guarantors.
Requirements depend on the lease terms. A Gold Coast commercial leasing lawyer can assess whether additional requests are reasonable.
Do different rules apply to retail shop leases?
Yes. Retail shop leases covered by Queensland’s Retail Shop Leases Act 1994 carry additional disclosure obligations and dispute resolution procedures.
Under section 50, a dispute can arise where a landlord fails to respond within one month or attempts to impose unreasonable conditions or new obligations. Under section 22D, an incoming tenant who is not a major lessee in Australia must provide the landlord with financial and legal advice reports before entering into the assignment.
A major lessee is a lessee or assignee that leases 5 or more retail shops in Australia. Commercial lease solicitors can confirm whether the retail legislation applies and help meet these requirements.
What happens if your landlord refuses consent?
Tenants should first obtain the landlord’s reasons in writing and consider whether the objections can be addressed through additional information, negotiation or security such as a bank guarantee. Solicitors for commercial leases can help prepare that response.
If the dispute cannot be resolved, section 142 allows the tenant to apply to the court. A civil litigation lawyer can assess whether proceedings are justified, while property lawyers on the Gold Coast can advise on the landlord’s obligations under the lease.
Retail shop tenants may also access QSBC mediation and, where appropriate, QCAT. Other eligible small business tenants may access QSBC mediation under the Small Business Commissioner Act 2022.
What if the assignment is part of a business restructure?
Transferring a lease to a new company or trust may constitute an assignment requiring landlord consent. Some commercial leases treat a change in ownership or control of a corporate tenant the same way, even where the business keeps operating from the same premises. A commercial lawyer on the Gold Coast can review the proposed structure before it proceeds.
Could you remain liable after assigning your lease?
Under section 144 Property Law Act 2023, if the buyer later assigns the lease to someone else (i.e. a second assignee), the original tenant and any guarantors are no longer liable for that next tenant’s breaches. However, this protection applies only to leases entered into on or after 1 August 2025, under section 255(2). The original tenant may still be liable for breaches by the buyer. The Retail Shop Leases Act has had a provision (section 50A) for a number of years, that an assignor and guarantor are relieved as liability with the proviso that disclosure obligations are correctly complied with.
Gold Coast business lawyers can review the assignment documents and identify any remaining liabilities.
Getting landlord consent right
Landlord consent can make or break a commercial property transaction, particularly when a business sale or restructure is subject to tight deadlines. Queensland’s updated legislation makes the consent process clearer. Tenants still need to check their lease, supply the right information and understand any ongoing liability. Gold Coast business lawyers can help before a sale contract is signed.
If landlord consent is holding up the sale or restructure of your Gold Coast business, QBM Lawyers can review your lease, explain your position under the Property Law Act 2023 (Qld) and assist with proposal notices, negotiation, mediation or court action where required. Contact our team to arrange a confidential discussion about your matter.
Frequently Asked Questions
Yes, but where section 142 of the Property Law Act 2023 applies, the landlord must not unreasonably withhold consent. A refusal may be justified by legitimate concerns about the buyer’s financial capacity, experience or proposed use of the premises. However, an outright prohibition on assignment may be treated differently.
Under section 142, the landlord generally has one month after receiving full particulars of the proposal to provide a decision notice. The parties may agree to extend that period. If the landlord fails to respond within the required timeframe, the tenant may apply to the court.
You may still be able to sell the business, but the transaction could be affected if the buyer needs to occupy the existing premises. Where consent is unreasonably withheld, you may be able to challenge the refusal. The terms of the business sale agreement will also be important.
