MST Lawyers Make Updates To Commercial Property And Leasing Services After Recent Judge Decision

Mason Sier Turnbull (MST) is a mid-tier law firm based in the Monash business and technological precinct of Melbourne. The firm employs a number of legal specialists who are determined to provide their clients with great service and sensible solutions. Each team is led by at least one Partner who possesses a wealth of knowledge in their specific discipline, allowing our clients to rest assured that their legal concerns are in the best hands. Some of the disciplines that we are able to provide advice in include: conveyancing, family, intellectual property and wills & estates.

In the past the commercial property and leasing lawyers employed by MST have looked towards section 60 of the Retail Leases Act 2003 when dealing with issues that have arisen due to seeking a transfer or assignment of a retail lease. In the Act, there are four scenarios outlined in which the landlord is entitled to withhold their consent. The most common of these being when the landlord believes that the proposed assignee does not possess the sufficient financial resources or business experience to meet the obligations of the lease.

A recent decision made by the New South Wales Court of Appeal, however, in the case of Lockrey v Historic Houses Trust of New South Wales [2012] NSWCA 249 has thrown this scenario into disrepute. The court found that the tenant is only required to provide the information that has been requested by the landlord and that this information must be specifically identified and reasonably required for the question of consent to come into play. Whilst the lawyers of MST understand that this was not a Victorian decision, they do point out that the Victorian courts are likely to consider similar reasoning in future cases.

So, what does all this mean for the landlords and tenants working with MST? In terms of landlords, they must take care to avoid making broad requests when determining a proposed assignee’s financial resources or business experience, otherwise they could find themselves in a similar situation to the one outlined above. In terms of tenants, they must be aware that there are a number of other reasons that a landlord may refuse their request (such as using the premises in a way that is not permitted under the lease or not complying with the reasonable assignment provisions of the lease). MST’s commercial property and leasing team is happy to answer any questions you may have about the changes.