First ask: assignment or a new lease?
An assignment transfers the existing tenant’s lease interest to the buyer, subject to the documents and any required consent. A new lease is a separate arrangement with the landlord. Neither should be assumed just because the business is advertised for sale.
With an assignment, you may be taking over the remaining term, rent reviews, options and obligations of an existing document. A new lease may offer different terms, but those terms still need to be negotiated. Identify which outcome the sale contract expects and what happens if it cannot be achieved.
Read the lease while you are considering the price
A profitable-looking business may have only a short time left at its premises. Compare the remaining term and any renewal options with your plans and investment. An option needs to exist, remain available and be exercised in the required way; it is not the same as an unconditional promise of extra years.
Read the permitted use, outgoings, repair and make-good clauses as well. If you want to change the operation, add services or alter the fit-out, check whether the lease and relevant approvals allow that. Existing trading is not proof that every proposed use is permitted.
Ask who owns the installed equipment and fit-out, whether any items are financed, and what the tenant must remove at the end. The sale contract’s asset list and the lease obligations need to tell a consistent story.
Landlord consent is a process, not a handshake
Check whether consent is required and what information must be provided about the incoming tenant. Queensland’s current Property Law Act provides a statutory consent process for certain lease dealings. Its application and interaction with the lease and retail legislation need checking; do not treat an informal conversation as the completed process.
Ask early who will obtain consent, what supporting information is needed and who prepares the assignment or new lease. Keep the proposal, replies and agreed conditions in writing. A landlord asking for financial or business information can affect the timetable, so leave room for that work before settlement.
Retail assignments bring their own disclosure questions
Not every business tenancy is a retail shop lease under Queensland’s Retail Shop Leases Act. The premises, business and statutory exclusions matter. If the Act applies, assignment disclosures and advice requirements need to be considered before the relevant commitments are made.
The outgoing tenant and landlord can have separate disclosure obligations. Ask which documents must be given, to whom and when—including whether a requirement arises before the business sale contract, rather than only before the lease assignment. Do not assume a document handed over at settlement cures an earlier omission.
A legal advice report is not financial advice about whether the business is worth buying. Have the accountant’s work, legal review and required reports coordinated without treating one as a substitute for another.
Who is personally liable after the handover?
A company taking the lease may still be required to provide a personal guarantee. Check its scope, duration and what happens on renewal, assignment or default. Also identify any replacement bank guarantee, bond or other security and when it must be available.
For the seller, handing over the business does not necessarily end lease liability. The retail legislation can provide a release for an outgoing tenant and guarantors where its conditions are met; other statutory rules and the transaction documents may also matter. Get the actual position checked rather than assuming either automatic release or permanent liability.
Make the intended release and replacement security explicit in the documents. The buyer’s security is not simply the seller’s deposit with a new name on it.
Line up the sale contract with the lease outcome
Before signing, discuss whether the sale should be conditional on suitable landlord consent, an effective assignment or an agreed new lease. Specify what must be achieved, by when, and the consequences if it is not. A condition only helps if its wording and operation fit the transaction.
Consider this hypothetical example: a buyer agrees to purchase a Caloundra business, expecting to keep operating from the same premises. The landlord is willing to discuss a new lease, but no terms have been agreed. If the sale contract requires settlement regardless, the buyer may face an avoidable mismatch between buying the business and securing its location. The solution is to address that dependency before committing—not assume a later extension will be granted.
Before completion, confirm that the necessary documents, consents, disclosures and security are ready and that the lease arrangement and business handover can take effect together. Early access, deposits and preliminary agreements deserve review too; leaving the final documents unsigned does not always mean nothing is binding.
Bring both sets of documents
Send the proposed sale contract and the entire lease together, including variations, option notices, disclosure documents and any landlord correspondence. Tell us the proposed settlement date, what has already been signed or paid and what you intend to change about the business.
That lets the legal review focus on the connection between the purchase and the premises. The best time to discover that the lease does not fit your plans is while there is still an opportunity to address it.
Sources and local information
General information about Queensland business purchases and leases, not advice on a particular transaction. The hypothetical example is not a client matter. Statutory coverage, transitional rules and the documents need individual review.