Assigning a retail shop lease in Queensland: Form 7, Form 9 and the Form 12 legal advice report

What a Form 12 legal advice report actually is

A Form 12 is the approved form under the Retail Shop Leases Act 1994 (Qld) in which a lawyer certifies that they have explained the retail shop lease — and, on an assignment, the assignment documents and disclosure — to the incoming tenant. It is signed by the lawyer, not the tenant, and it is given to the landlord as part of the consent process.

The point of the form is protective. Parliament's view was that a small business tenant signing a long lease with rent reviews, outgoings, make-good and personal guarantees should have had it explained to them by someone independent of the landlord and the agent. The Form 12 is the evidence that happened.

The related forms most people meet at the same time are the Form 7 disclosure statement (given by the landlord, or by the assignor to the assignee), the Form 8 waiver of disclosure, the Form 9 financial advice report signed by an accountant, and the Form 10 and Form 11 disclosure statements used in assignment scenarios. Which forms your transaction needs depends on whether the lease is a retail shop lease, whether it is an assignment or a new lease, and whether any waiver has been given.

When the Act applies at all

The Retail Shop Leases Act applies to a lease of a retail shop — premises in a retail shopping centre, or premises used wholly or predominantly for a retail business listed in the regulation. It does not apply to every commercial tenancy. Large premises above the floor-area threshold, premises leased to listed corporations and their subsidiaries, and certain non-retail uses fall outside it.

Getting this question wrong at the start is the most common error we see. If the Act applies and disclosure is not given properly, the tenant may have termination rights or a compensation claim. If it does not apply and everyone behaves as though it does, weeks are spent producing forms nobody needed.

How an assignment runs, step by step

In a typical business sale where the premises are leased, the sequence is:

• The buyer and seller sign the business sale contract, conditional on the landlord consenting to assignment of the lease
• The buyer applies for consent and provides the landlord with financial and business references
• The assignor gives the assignee a Form 9 (assignor's disclosure) and the landlord gives disclosure where required
• The assignee obtains a financial advice report from their accountant and a Form 12 legal advice report from their lawyer
• The landlord's solicitors prepare a deed of consent to assignment, usually with a guarantee and often with a request for a bank guarantee or bond top-up
• Consent is given, the deed is executed, and the assignment settles with the business sale

Why it delays settlements

Landlord consent is the single most common reason a Queensland small business settlement moves. Centre landlords have internal approval processes measured in weeks, not days, and they will not start until the disclosure and advice reports are complete and correct.

Build the timing into the contract. A 30-day settlement on a business with a shopping-centre lease is optimistic unless consent is already well advanced. We usually recommend a consent condition with a realistic date and an extension mechanism, rather than a date that guarantees a default notice.

What we check before signing the Form 12

The report is not a formality. Before we sign, we go through the lease with the incoming tenant and cover the terms that decide whether the business is viable:

• Term, options to renew and the notice dates that must be met to exercise them
• Rent review mechanism — CPI, fixed percentage or market review, and whether ratchet clauses apply
• Outgoings, promotion and marketing levies, and how they are apportioned and audited
• Permitted use, trading hours and exclusivity or relocation and demolition clauses
• Make-good and reinstatement obligations at the end of the term, which are frequently the largest hidden liability
• Personal guarantees, bank guarantees and security deposits
• Assignment and further assignment rights, and whether the outgoing tenant stays on the hook

What it costs and how fast we turn it around

We act on retail shop lease assignments across the Sunshine Coast, Moreton Bay and greater Brisbane, and we quote a fixed fee once we have seen the lease and the assignment documents. Most Form 12 reports are turned around within a few business days of receiving the lease, the disclosure and the deed — often faster where a settlement date is under pressure. Call 0488 340 853 with the documents and we will confirm the fee and the timing.

Form 12 and retail shop lease assignment questions