MAX and Dave were joint owners of a café business.

They both executed a retail lease, which had three years to run with an option to renew for an additional 5 years.

Max had a young family and found it difficult to juggle work, kids and surfing, so he decided to sell his share in the business to Dave.

Dave wrote to the Landlord, requesting consent to Max assigning the lease and making Dave solely responsible for the lease.

A couple of weeks went by, and Dave had not heard from his landlord, Dave contacted the landlord again, as the sale of the business was subject to the assignment of the lease and both Max and Dave were keen to settle the business sale.

The landlord knew Max well and was aware of his strong financial position but was not so familiar with Dave.

With a view to assessing the merits of the proposed assignment of lease, the landlord asked Dave to provide information on his ‘financial standing’.

Dave did not comply with the request.

Months went by and the landlord had not provided consent to the assignment to Dave.

Dave’s lawyer commenced court action, seeking a declaration that the landlord had unreasonably withheld consent.

The court found that the Landlord’s request for information concerning Dave’s “financial standing” lacked the essential “specificity” to which a lessee was entitled to expect from such a request and held that the landlord’s consent to the assignment of the lease was deemed to have been given.

Although the landlord was entitled to request information regarding Dave’s financial position, a landlord must specify which particular documents are sought, such as financial statements and tax returns for a specified period, or otherwise clearly define what is required from the lessee.

A landlord must also deal expeditiously with a request for consent to an assignment of lease or risk consent being deemed to be given.

Thank you to Anthony Fogarty for his assistance with this column.

If you would like a particular issue addressed, please email me at manny@tblaw.net.au or call me on (02) 66 487 487.