Assigning A Lease – How A Deed Of Assignment Works

When you’re entering or leaving a business premise as a tenant in New Zealand, it’s crucial to check if you need to transfer a lease. In other words, if the ownership of the business is changing, you need to make this official with your tenant. 

This is known as ‘assigning a lease’ or ‘transferring a lease’. It occurs when you’re selling your business and the buyer agrees to be bound by the existing lease, or you’ve decided to move premises and have found another business willing to take over your current lease.

Essentially, when you assign your lease, you’ll be handing over the rights and obligations of that lease to another party. It’s important to ensure you’re not left liable for any part of the old lease! 

This is also known as a Deed of Assignment, which we’ve written about in more detail here. 

The Process Of Transferring A Lease

Transferring a lease in New Zealand doesn’t have to be a complicated process. Let’s simplify it. 

1. Review The Existing Lease

Firstly, you’ll need to check that there aren’t any conditions in the lease that would prevent it from being transferred. Review the terms of your lease carefully, and consider consulting a lawyer to assist with this step! 

2. Landlord’s Consent

Once you’ve confirmed that the lease can be assigned, you’ll need the landlord’s written consent and understand any requirements for the transfer. Each landlord may have different stipulations, so clear communication is key. 

3. Discuss The Assignee

Next, discuss with your landlord who will be taking over the lease, known as the incoming tenant. Gather their name, contact details, and any relevant documents needed for the transfer, such as evidence of their financial standing or business experience. 

Following this, the landlord confirms their consent to the transfer, and the incoming tenant agrees to it. This is formalised in a Deed of Consent to Assignment. 

The assignee will then agree to take on the rights under the existing lease from a specified date until the lease term concludes. 

All parties should review the terms of the Agreement to ensure they are satisfied with their obligations and the rights or interests they will hold in the lease. 

I’m The Outgoing Tenant – What Else Should I Do?

With the landlord’s consent in place, you can proceed with creating a Deed of Transfer of Lease.

This document will officially release you from any responsibilities or liabilities under the lease. However, until this is formalised, continue to fulfil your lease obligations. 

Retail Leases

If you’re transferring a retail lease, the steps you need to take in New Zealand may differ. It’s advisable to review the Commercial Tenancies Act 1991, which governs retail leases. 

Considerations may include:

• Under a retail lease, providing evidence of the incoming tenant’s financial reliability can help in obtaining the landlord’s consent.
• If the incoming tenant lacks financial credibility, the landlord is not obliged to consent to the transfer.

Understanding your rights and obligations under the type of lease you hold is essential. More information about transferring leases can be found here. 

Need Help?

If you need a lease drafted or reviewed, we’re here to assist! Contact our friendly team on 0800 002 184 or [email protected] for a free, no-obligation consultation about your specific situation and the legal documents that suit your needs.

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