deed of assignment of lease form

How Do You Assign or Transfer a Commercial Lease?

By Jessica Dinh Lawyer

Updated on December 15, 2023 Reading time: 5 minutes

This article meets our strict editorial principles. Our lawyers, experienced writers and legally trained editorial team put every effort into ensuring the information published on our website is accurate. We encourage you to seek independent legal advice. Learn more .

• 1. Seek Your Landlord’s Consent 

2. Deed of Assignment

3. transferring a retail lease, key takeaways.

If you lease a commercial property to operate your business, there may be situations where you need to transfer the lease. There are usually two situations when a tenant will transfer (also known as an assignment ) a commercial lease to another party (the assignee) before the end of a lease term. Namely, where the tenant is:

• selling their business, and the purchaser agrees to accept the existing lease rather than enter into a new lease with the landlord; or
• is proposing to exit the lease and has found a party who will take on the existing lease.

This article explains how the transfer of a commercial lease works. It also explains the critical terms of the deed of assignment from the perspective of the landlord, tenant and assignee.

1. Seek Your Landlord’s Consent 

As soon as you propose an assignment as a tenant, you should:

• review the existing lease to identify if the lease can be assigned;
• identify the requirements of landlord’s consent upon assignment; and
• correspond with the landlord or agent as to consent and approval of the proposed assignee under the lease. 

When seeking your landlord’s consent for the assignment, the proposed new tenant must usually provide their financial and business references to the landlord.

Can a Landlord Refuse to Assign a Retail Lease? 

If the lease is a retail lease, the landlord will not be able to withhold consent to an assignment unreasonably. The retail legislation (different in each state) provides the grounds on which the landlord can withhold their consent. These generally include the:

• assignee proposes to change the permitted use;
• assignee has financial resources or retailing skills that are inferior to the assignor, and
• assignor has not complied with the relevant steps, per the retail legislation in that particular state, including providing a disclosure statement.

Ensure that you check the retail legislation in that particular state when carrying out an assignment.

After obtaining the landlord’s consent, a deed of consent to assignment is prepared (deed of consent).

A deed of consent is a legal document that outlines that the:

• landlord confirms their consent to the transfer of lease;
• tenant agrees to transfer their entire interest in the lease to the assignee from a specific date (the assignment date); and
• assignee, or new tenant, agrees to assume the rights and obligations of the lease as if they were the original tenant (such as repairs, security and payment of rent and outgoings) from the assignment date. This will continue until the end of the lease term and during any option or renewal terms.

The Landlord

Generally, the landlord’s key concern is that the transfer does not affect their rights under the lease. The landlord can address this concern by ensuring that the original tenant (assignor) has complied with all of their obligations under the lease until the assignment date. The landlord will have the right to take action against the tenant after the assignment date for any existing breach of the lease. 

Additionally, the landlord will want to make sure that the assignee can comply with the lease obligations. This will often involve an assessment of the assignee as a tenant. The landlord will thoroughly examine the information before confirming their consent to the transfer. This might include: 

• financial statements; 
• business history; and 
• professional references. 

Finally, there is usually an agreement about who is liable for the costs of the deed of assignment. The landlord’s lawyer usually prepares the agreement. However, the outgoing tenant or the incoming tenant pays these costs, not the landlord.

The deed of assignment usually requires the assignee to give the relevant security and guarantees.

The Outgoing Tenant

As the outgoing tenant, your key concern is to be released from your obligations under the lease from the assignment date. The deed of assignment can address this concern by specifying that:

• the tenant is released from any claims or liabilities under the lease from the assignment date (provided that there is not an existing breach of the lease); and
• if the tenant has provided any security, it is to be returned or refunded.

It is important for you to remember that you are bound to the terms of the lease until the transfer of the commercial lease is formalised through the deed of assignment. Accordingly, you should continue to comply with your obligations under the lease until the assignment date.

On that note, a landlord might not agree to release you entirely from your obligations if the retail legislation in your state does not prevent this. This means that if the new tenant defaults, you could be responsible for fulfilling the lease obligations. In that case, you would need guarantees or an indemnity from the new tenant.

If the transfer of deed has to be registered, typically with retail leases, you (the assignor) usually organise the registration of the transfer, whose costs are divided with the new tenant  (the assignee).

The Assignee

The new tenant’s, or the assignee’s, key concern is for the landlord to accept the transfer of the commercial lease from the assignment date. The deed of assignment can address this concern by providing that:

• the landlord accepts the assignee as tenant from the assignment date;
• the landlord will observe their obligations specified in the lease in favour of the assignee; and
• if required in the relevant state, the parties sign a transfer of lease form and register the transfer at the land titles office.

The assignee should ensure that they have reviewed the contents of the commercial lease (including the disclosure statement if it is a retail lease). Then, they must review the lease before signing the deed of assignment. This is because the assignee will need to comply with the obligations of the tenant from the assignment date. These obligations may include the provision of security and a personal guarantee.

A personal guarantee is taken on by an individual to guarantee the obligations of another individual or entity. For example, the assignee providing may provide a personal guarantee where a particular party becomes a guarantor. If you cannot meet your obligations (such as to pay the lease), then the guarantor will have to meet that obligation themselves.

Before finalising the deed of assignment, it is important that the landlord, assignor and assignee agree on who bears the costs of preparing, negotiating and registering the deed of assignment. Generally, you, as the assignee, will bear the costs. However, you may choose to add a cap or exclude negotiation costs. 

If the lease you are transferring is a retail lease, the tenant will typically need to give the assignee a disclosure statement. This statement also includes details of any changes to the disclosure statement that the landlord provided when the lease was first entered into.

The disclosure statement outlines the vital information that the assignee needs to know, including the:

• current annual rent under the lease;
• current estimated outgoings payable under the lease;
• term of the lease and any options to renew; and
• details of the premises. 

Generally, the tenant may request an updated disclosure statement from the landlord before the transfer of the commercial lease. The landlord has an obligation to provide the updated disclosure statement, usually within 14 days from the date of the request.

The disclosure statement requirements differ between the states and territories. For example, in:

• New South Wales, the assignee must receive the disclosure statement at least seven days before the date of the transfer; and
• Victoria and Queensland, the assignee must receive the disclosure statement at least seven days before the assignor requests the landlord’s consent.

The consequences of failing to provide a disclosure statement also differ between the states and territories. For example, the assignee may:

• withhold payment of rent;
• seek compensation from the landlord; or
• terminate the lease within a specific timeframe.

It is essential for all parties to be aware of the requirements and consequences of the disclosure statement provisions in their particular state or territory.

Additionally, transferring a lease may also lead to stamp duty implications . Stamp duty is a tax imposed on the purchase of assets and transactions of property. Therefore, if you are transferring a lease, you will commonly have to pay stamp duty. It is important that you are aware of the circumstances where you, as a tenant, will be required to pay stamp duty.

A factsheet that sets out the three ways to end a commercial lease in Australia: surrendering your lease, assigning it or subletting it.

Whether you are a landlord, tenant or assignee, it is crucial that you understand your rights and obligations when transferring a commercial lease. Further, the transfer of a retail lease leads to additional requirements and consequences related to the disclosure statement. Finally, you need to be aware of the steps you should take to ensure a smooth assignment.

If you need assistance with drafting or reviewing the terms of a deed of assignment, our experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page .

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Deed of Assignment of Lease Agreement to transfer complete right to the Tenant.

Format of deed of assignment of lease agreement for transferring right to the tenant..

An assignment of a lease is a complete transfer of the right to be the tenant under the lease. The third-party assignee becomes the "tenant" under the lease, taking over all of the leased premises, substituting for the old tenant. When the lease is assigned, the assigner move out permanently and a new tenant moves in for the remainder of the lease term. An assignment of a lease differs from a sublet. With a sublet, the original tenant gives up an apartment temporarily. With an assignment, the original tenant gives up the apartment permanently. Assignment agreement should be legally binding, so it is necessary to prepare and sign a deed of assignment.

DEED OF ASSIGNMENT OF LEASE

THIS DEED OF ASSIGNMENT is made this ______ day of_____

Mr. _________________ son of _____________ Resident of _____________ hereinafter called "the Assignor" of the One Part:

Mr. _____________ Son of _____________ Resident of _____________ hereinafter called "the Assignee" of the Other Fart.

WHEREAS: 1. By a Deed of Lease dated_____________ and made between_____________ therein referred to as the Lessor of the One Part and the Assignor, therein referred to as the Lessee of the Other Part and registered with the Sub-Registrar of Assurances at _____________ under No _____________ of Book No. I on the _____________ the said Lessor demised unto the Assignor in perpetuity ALL that piece of land situate at_____________ and more particularly described in the Schedule thereunder being the same as described in the Schedule hereunder written together with the buildings and structures standing thereon at the rent and subject to the covenants and agreements therein contained;

2. By Clause_____________ of the said Deed of Lease it was in teralia provided as follows, "Not to assign the demised premises for the whole of the term hereby granted without the previous consent in writing of the Lessor his heirs, executors, administrators and assigns, which consent shall not be unreasonably withheld".

3. The Assignor has agreed with the Assignee for an assignment to him of the said demised premises for the remaining term in perpetuity free from all encumbrances at or for the price of Rs _____________.

4. The said Lessor by his letter dated_____________ has given his consent to the assignment of the demised premises.

NOW THIS DEED WITNESSETH that in pursuance of the said agreement and in consideration of the sum of Rs_____________ (Rupees) paid in the manner following viz. Rs_____________ on_____________ day of_____________ as earnest or deposit and Rs (Rupees) on or before the execution of these presents making together Rs _____________ (Rupees _____________ _____________. ) by the Assignee to the Assignor (the receipt whereof the Assignor doth hereby admit) He the Assignor hereby assigns unto the Assignee ALL that piece of land situate at_____________ in the Registration Sub-District of_____________ and more particularly described in the Schedule hereunder written TOGETHER WITH the buildings and structures thereon AND TOGETHER with all rights, liberties privileges, easements and appurtenances whatsoever to the said premises or any part thereof belonging or in anywise appertaining or usually held or occupied therewith or reputed to belong or be appurtenant thereto AND all the estate, right, title, interest property, claim and demand whatsoever of him the Assignor in and to the said premises or any part thereof TO HOLD the said land and other the premises hereby assigned unto the Assignee in perpetuity subject to the payment of ground rent of Rs_____________ reserved by the said Deed of Lease and to the performance and observance of the covenants and stipulations therein contained and on the part of the Lessee to be observed and performed and which henceforth on the part of the Assignee ought to be observed and performed.

AND THE ASSIGNOR COVENANTS WITH THE ASSIGNEE AS FOLLOWS - the said lease is now a valid and subsisting lease of the said premises hereinbefore expressed to be hereby assigned and is in no wise void or voidable that all the rents reserved and the covenants by the Assignor and the conditions contained in the said Deed of Lease have been paid, observed and performed upto the date of these presents; that the Assignor now has in himself good right and absolute power to assign the said premises unto the Assignee for the term and in the manner aforesaid that it shall be lawful for the Assignee from time to time and at all times hereafter during the said term to peaceably and quietly hold, possess and enjoy the said premises hereby assigned or expressed so to be with the appurtenances on and subject to said lease and receive the rents, and profits thereof for his own use and benefit without any eviction interruption claim or demand whatsoever from or by the Assignor or from or by any other person or persons lawfully or equitably claiming by, from, under or in trust for them. that the said premises are free and clear and freely clearly and absolutely acquitted, exonerated, released and forever discharged or otherwise by the Assignor well and sufficiently saved, defended, kepi harmless and indemnified of from and against all estates charges and encumbrances whatever made executed occasioned or suffered by the Assignor or by any other person or persons having or lawfully claiming by from under or in trust for him. that the Assignor and all persons having or lawfully claiming by. from, under or in trust for him shall and will from time to time and at all times hereafter during the said term at the request and costs of the Assignee do and execute or cause to be done and executed all such further and other lawful and reasonable acts, deeds, things, matters and assurances in the law whatsoever for further and more perfectly and absolutely assuring the said premises hereby assigned or expressed so to be and every part thereof unto and to the use of the Assignee for the residue of (he said term and in manner aforesaid as shall or may be reasonably required.

AND the Assignee doth hereby covenants with the Assignor that he the Assignee will henceforth during the said term pay the rents reserved by and perform all the covenants by the Lessee and conditions contained in the said Deed of Lease and keep indemnified the Assignor and his estate and effects from and against the payment of the said rent and the observance and performance of the said covenants and all actions, proceedings, costs, damages, claims, demands and liability whatsoever for or on account of the same or in anywise relating thereto.

IN WITNESS WHEREOF the parties hereto have hereunto set and subscribed their respective hands the day and year first hereinabove written.

THE SCHEDULE ABOVE REFERRED TO

Signed and Delivered by the within-named Assignor

Signed by the within-named Assignee

Received from the Assignee above-named a sum of Rs_____________ today which together with the sum of Rs_____________ paid on_____________ as earnest makes up the sum of_____________ Rupees (Rupees) being the full consideration money to be paid by him to me. Witnesses:

I say received.

Relevant Sections of Transfer of Properties Act 1882

Section 107 "Leases how made"

107. A lease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee: Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession.

Section 108 "Rights and liabilities of lessor and lessee"

108. In the absence of a contract or local usage to the contrary, the lessor and the lessee of immovable property, as against one another, respectively, possess the rights and are subject to the liabilities mentioned in the rules next following or such of them as are applicable to the property leased :-

A. Rights and liabilities of the Lessor (a) the lessor is bound to disclose to the lessee any material defect in the property, with reference to its intended use, of which the former is and the latter is not aware, and which the latter could not with ordinary care discover; (b) the lessor is bound, on the lessee's request to put him in possession of the property; (c) the lessor shall be deemed to contract with the lessee that, if the latter pays the rent reserved by the lease and performs the contract binding on the lessee, he may hold the property during the time limited by the lease without interruption. The benefit of such contract shall be annexed to and go with the lessee's interest as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested. B. Rights and liabilities of the lessee (d) if during the continuance of the lease any accession is made to the property, such accession (subject to the law relating to alluvion for the time being in force) shall be deemed to be comprised in the lease; (e) if by fire, tempest or flood, or violence of any army or of a mob, or other irresistible force, any material part of the property be wholly destroyed or rendered substantially and permanently unfit for the purposes for which it was let, the lease shall, at the option of the lessee, be void : Provided that, if the injury be occasioned by the wrongful act or default of the lessee, he shall not be entitled to avail himself to the benefit of this provision; (f) if the lessor neglects to make, within a reasonable time after notice, any repairs which he is bound to make to the property, the lessee may make the same himself, and deduct the expense of such repairs with interest from the rent, or otherwise recover it from the lessor; (g) if the lessor neglects to make any payment which he is bound to make, and which if not made by him, is recoverable from the lessee or against the property, the lessee may make such payment himself, and deduct it with interest from the rent, or otherwise recover it from the lessor; (h) the lessee may even after the determination of the lease remove, at any time whilst he is in possession of the property leased but not afterwards, all things which he has attached to the earth : provided he leaves the property in the state in which he received it ;

Legal Formats, Alphabetical Order

Agreement Formats

Deed of Assignment - Commercial Lease

If the commercial lease was for a term of up to 7 years (i.e. a period not exceeding 7 years) select the option "Unregistered Lease (i.e. a lease for a commercial property that does not exceed 7 years)". If the commercial lease was for a term of more than 7 years (i.e. a period exceeding 7 years) select the option "Registered Lease (i.e. a lease for a commercial property that is for more than 7 years)".

Need personalised assistance? At the end, you can choose to consult a lawyer.

DEED OF ASSIGNMENT OF COMMERCIAL LEASE

This deed is dated ________

________ , a company incorporated and registered in England and Wales with Company Number ________ whose registered office address is at ( the Assignor ):

________ , a company incorporated and registered in England and Wales with Company Number ________ whose registered office address is at ( the Assignee ):

I. The remainder of the term under the Lease is vested in the Assignor.

II. The Assignor has agreed to assign the Lease to the Assignee on the terms contained in this deed.

III. The Landlord's consent is not a requirement for assignment under the Lease.

AGREED TERMS

1. Interpretation

Contract: a contract for the assignment of the Lease dated ________ , made between ________ and ________ .

Lease: a lease dated ________ , between ________ (the Landlord ) and ________ (the Tenant ) and ________ (the Guarantor ) relating to the property:

Lease Obligations: the tenant covenant and all the terms and conditions contained or referred to in the Lease.

Premium: the sum of £ ________ (________) (exclusive of VAT).

Property: the property located at the address:

Rent: the rent reserved by the Lease.

VAT: value added tax chargeable in the UK.

(a). The headings of Clauses in this deed shall not affect the interpretation of this deed.

(b). A reference to the Lease includes any deed, licence, consent, approval or any other instrument that is supplemental to it.

(c). A reference to the Property includes the whole and any part of it.

(d). Tenant covenant has the same definition under the Landlord and Tenant (Covenants) Act 1995.

(e). A person also refers to a natural person, corporate or unincorporated body (regardless of its separate legal personality).

(f). Unless required otherwise in the context used, words in the singular shall include the plural and words in the plural shall include the singular.

(g). A reference to legislation or a legislative provision is a reference to the amended version, extended version or re-enacted version from time to time.

(h). Any obligation requiring a party to not do something also includes an obligation to not allow such a thing to be done.

2. ASSIGNMENT

(a). On account of the Assignee's payment of the Premium to the Assignor (of which the Assignor acknowledges receipt), the Assignor assigns the Property to the Assignee for the remainder of the unexpired term of the Lease, subject to the payment of the Rent and adhering to the Lease Obligations.

(b). The Assignee shall pay the Premium via bank transfer to the following bank account:

(c). The Assignee shall pay the Premium to the Assignee using the agreed payment method on ________ .

(d). The Property shall be assigned without any adverse right or claim affecting its use or transfer, except the following:

(I). any matters, except financial charges, that are contained or referred to in the entries or records made in any registers maintained by the Land Charges Department of HM Land Registry as at ________ ;

(II). all matters that are contained or referenced in the Lease;

(III). any matters that can be discovered by inspecting the Property before the date of this deed.

(IV). any matters which the Assignor is not, nor could it be aware of;

(V). any matters which have been disclosed or which would have been disclosed by the searches and enquiries which a prudent Assignee would have made before entering this deed;

(VI). any notice, order or proposal given or made (before or after the date of this deed) by a body acting on statutory authority;

(VII). any matters which are, or (in the case of a Lease that will be unregistered) would be, unregistered interests which override first registration under Schedule 1 of the Land Registration Act 2002; and

(VIII). any matters disclosed in the Title Documents.

3. GUARANTEE OF TITLE

(a). The Property comes assigned with full title guarantee.

(b). The implied covenant set out in section 4(1)(b) of the LPMPA 1994 shall not extend to any breach of the Lease relating to the physical state or condition of the Property.

(c). For the purposes of section 6(2) of the LPMPA 1994, and notwithstanding section 6(3) of the LPMPA 1994, all matters which have been recorded in publicly accessible registers, at the date of this deed, shall be deemed to be within the Assignee's actual knowledge.

4. INDEMNITY

(a). The assignee covenants that, from the date of this deed until the earlier of the term of the lease or until the Assignee is released from the tenant covenant imposed by the Landlord and Tenant (Covenants) Act 1995, it will pay the Rent and any VAT payable on it and observe and perform the Lease Obligations and indemnify the Assignor against all proceedings, costs, claims and expenses arising because of any failure to do so.

(b). By an indemnity only, the Assignee covenants with the Assignor that it will observe and perform the changes, encumbrances, covenants and restrictions contained or referred to in the Title Documents for as long as they are subsisting and capable of taking effect. The Assignee shall also keep the Assignor indemnified against all proceedings, costs, claims and expenses arising from any failure to do so.

(a). Upon the completion of this deed, the Assignee shall make sure to pay £ ________ towards:

(I). the Assignor's legal costs; and

(II). any disbursements incurred in connection with the assignment of the lease.

(a). Every amount identified as payable by a party to the other party under this deed shall be exclusive of any applicable VAT.

(b). Where there is VAT chargeable on any supply made under this deed, the party receiving the supply shall, subject to receipt of a valid VAT invoice, pay the party the supplier an amount equal to that VAT as additional consideration on the date that the supply is made.

7. 585585 828552585

(a). 5588 5225 82282825228 252 222852 525222222 8228222 252 2552828 525 25228 2528252282 2825 588 25288258 58885888228, 82552822252282, 222228528228, 555522222228, 52525825258228 525 5252222228 8228222 2522 52852822 22 828 8582282 252225.

(b). 552 88882222 525282 582228825228 2552 82 22225822 2588 5225, 82 5228 222 5282 22 522 52252822252822 25 85555222 (82228222 25 222882222) 58852 2522 25282 85885 552:

(I). 822258225 82 2588 5225; 25

(II). 52258825 82 522 8582222 82552822252282 25 528222828 2552 252 88882225'8 8228225282 558 25288525 22 522 8582222 228585828 558825 82 252 88882222'8 8228225282 822252 252 5522 22 2588 5225.

(c). 552 885888822 225 25555 85588 222 82 25885525 82 52225822 822258225 82 2588 885582.

8. RIGHTS OF THIRD PARTIES

This deed does not give rise to any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this deed.

9. GOVERNING LAW

This deed and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.

10. JURISDICTION

Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this deed or its matter or formation.

Executed as a deed by the Assignor acting by:

________ , ________

_______________________

( the Assignor )

Executed as a deed by the Assignee acting by:

______________________

( the Assignee )

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