Selling your business or moving out of leased premises? Learn the key legal steps to assign a commercial lease in NZ. Core Legal—expert lease lawyers in Masterton and Wellington.

Things to Consider When Assigning a Commercial Lease – Core Legal Masterton & Wellington

If you’re selling your business or exiting leased commercial premises, one of the most critical steps is assigning your commercial lease. At Core Legal, we regularly help clients in Masterton, Wellington, and the wider Wairarapa region navigate the complexities of lease assignments to avoid costly delays and legal risks.

Real-World Example: Why Legal Advice Matters

A tenant in a small industrial unit privately negotiated the sale of her business without initially seeking legal advice. After contacting a lawyer post-sale agreement, she learned she needed to assign the lease to the buyer with the landlord’s formal consent—a step that had not been factored in.

The landlord requested financial documentation about the buyer to assess their suitability, resulting in unexpected legal costs and delays to settlement. This situation could have been avoided with early legal guidance.

What Is a Deed of Assignment of Lease?

Assigning a lease means transferring your legal rights and obligations under the lease to a new tenant (the assignee) for the remainder of the term. This is formalised through a Deed of Assignment of Lease.

Landlord’s Consent Is Essential

Before any lease assignment can proceed:

• The original tenant (assignor) must obtain the landlord’s consent.

• The landlord may request:

  • Proof of the assignee’s financial capacity

  • Business background information

  • Guarantees or bonds

Failure to obtain this consent is a breach of the lease and can derail a business sale.

Continued Liability for Original Tenant

Even after assigning the lease, the original tenant (and any guarantor) often remains liable if the new tenant defaults—unless otherwise negotiated in the deed. This liability typically continues until the end of the original lease term.

Important Legal Considerations

Before assigning a lease, make sure you:

• Review your Deed of Lease (assignment isn’t permitted from an Agreement to Lease).

• Confirm the lease allows for assignment and understand any conditions.

• Are up to date on rent and not in breach.

• Ensure the assignee is financially sound and respectable.

• Understand if legal fees are your responsibility.

• Know whether the landlord requires additional security (e.g. bond or guarantee).

Note: Assignment is different from subleasing. In a sublease, you remain a tenant and are still primarily responsible for lease obligations.

Get Legal Advice Before Assigning a Lease

Assigning a lease is more than just handing over the keys—it’s a binding legal process that can have ongoing consequences. If you’re selling your business, downsizing, or exiting your premises, speak to the commercial property law experts at Core Legal.

We offer cost-effective, fixed-price Initial Consultations across Wellington and Masterton, helping you understand your legal obligations and protect your interests every step of the way.

???? Contact Core Legal today to ensure your lease assignment is handled professionally and without surprises.