Legal Question re tenancy

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MrAmerica

128 posts

Master Geek
Inactive user

#248343 21-Mar-2019 08:56

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Our Lawyer is away having a baby and seems a bit busy to do any lawyering today :)

Hoping someone can answer this for me, we have a commercial tenancy with a standard 6.1 clause that says the following

No Assignment
6.1 The Tenant shall not assign or agree to assign this Agreement or the Tenant’s interest under this Agreement and the
Tenant shall not register any caveat against the land in respect of its interest under this Agreement. The Tenant shall not
be entitled to exercise the right of assignment contained in the Lease until such time as the Tenant has signed the Lease.

Does this mean we can't sublease if we move out? It seems that it does but I am not sure.

sxz

761 posts

Ultimate Geek

#2202725 21-Mar-2019 09:12

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Good news - you should be fine!

That clause you are referring to is in your Agreement to Lease not your actual lease. Your actual lease should allow assignment/subletting with the consent of the landlord, such consent not to be unreasonably withheld.

An Agreement to Lease is kind of like a preliminary document, where you agree on the basic terms and agree that you will, in future, sign an actual deed of lease (which is a much longer document). Real Estate agents love doing it in two stages like this, because an Agreement to Lease is a short document and less scary for tenants to sign. Yes it bugs me that its often done in two stages like this, but that's what people tend to do. Even if you don't get around to signing the deed of lease, you are deemed to be bound by the terms of an ordinary ADLS deed of lease anyway, otherwise modified to match the terms contained in your agreement to lease (look at clause 4.3 of your agreement to lease for this provision).

The good news is that although you are not able to assign or sublet an Agreement to Lease, you ARE able to assign or sublet your actual deed of lease, unless the landlord has a good reason not to consent (i.e. if security will be an issue, the subtenant will be bad for business etc). Have a look at clause 33.1 of your actual deed of lease (if you have it). If you dont have one, get it signed, then ask to sublet or assign it.

I'm a lawyer, so feel free to PM if you need further help :)

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