In 2006 the Retail Shop Leases Act (Act) was amended to provide
that an assignor would be released from liability for any breach of
the lease by an assignee after the assignment date (statutory
However, the assignor is only entitled to a statutory release
the lease was entered into on or after 3 April 2006; AND
the assignor gave the prospective assignee a disclosure
statement at least 7 days before asking the lessor to consent to
the assignment; AND
the prospective assignee gave a disclosure statement to the
assignor before the lessor was asked to consent to the assignment;
the lessor gave the prospective assignee a disclosure statement
and a copy of the lease at least 7 days before the lessor consented
to the assignment; AND
the prospective assignee gave the lessor a disclosure statement
before the lessor consented to the assignment; AND
none of the disclosure statements referred to above are
The Act makes no mention of a statutory release for the
Is a lessor obliged to give a release to an assignor?
Generally, the answer is "No". Most leases state that
an assignor and any guarantor will continue to be bound by the
lease after an assignment. Consequently, there is no contractual
requirement for a lessor to release an assignor (contractual
In addition, the Act does not require a lessor to give an
assignor a contractual release. The question as to whether an
assignor is entitled to a statutory release is a matter of law
having regard to whether the 6 requirements mentioned above have
been satisfied. If this statutory release exists then it will
override the wording of the lease or any consent to assignment
What should a lessor do if an assignor or guarantor asks for a
As there is no legal obligation to give a contractual release,
the lessor's decision is purely commercial in nature.
The lessor's decision should not be based on the assumption
that the assignor is already entitled to a statutory release. At
the time of consenting to an assignment it is unlikely that a
lessor will be in a position to be satisfied that all the
disclosure statements have been given and none of them are
If a lessor does elect to grant an assignor a contractual
release then careful drafting of the release clause is called for
to ensure that the assignor remains 'on the hook' for
obligations under the lease up to the assignment date.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
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