Introduction
As Landlord, your key consideration is whether to consent to such a transfer. Without consent, the Purchaser will have no right to use the Premises and, if the Tenant has already transferred the Business to the Purchaser, then the Tenant would be in breach of the Lease.
In seeking consent for the transfer, the Tenant should provide you with such information as a Landlord reasonably requires about the financial resources and business experience of the Purchaser of the Business. This would usually be a Statement of Assets and Liabilities (which may be prepared and certified by the Purchaser's accountant), two financial references (e.g. from an accountant or banker) and two business references (e.g. from other Landlords or suppliers).
In considering the information received, you should form an opinion as to whether or not you believe the Purchaser will have the financial resources and business experience necessary to allow him/her/it to meet the rent and other obligations of the Lease. Note that most Retail Leases require that you cannot unreasonably withhold consent to a transfer of Lease.
The Retail Leases Act 2003 limits the grounds on which you can validly refuse to consent to a transfer of Lease. If you are intending to withhold consent, you should ensure that you first receive proper legal advice to ensure that you are not exposing yourself to liability.
In any case, you should obtain proper legal advice when considering consent to ensure that your interests are protected in the transfer. Your costs of considering consent to the transfer would usually be paid by the Tenant under the terms of the Lease.
If you require assistance please contact us on 1300 205 506 or by email at sp@sharrockpitman.com.au.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
Mitchell is the Managing Principal of our law practice.
He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.
