Assignment and subletting are different transactions
The two requests get used loosely but mean different things to a landlord. An assignment substitutes a new tenant into the existing lease: the assignee takes on the lease directly with the landlord for the balance of the term, and the outgoing tenant is generally looking to be released from future liability. A sublease is narrower: the original tenant stays on the head lease and remains answerable to the landlord for rent and compliance, while granting someone else the right to occupy under a separate arrangement that sits underneath it. A subtenant's obligations run to the head tenant, not to the landlord, which is one reason landlords typically have more contractual room to control subletting than assignment.
For a retail lease, the grounds to refuse an assignment are fixed by law
Where the Retail Leases Act 1994 (NSW) applies, section 39 sets out an exhaustive list of grounds on which a landlord can withhold consent to an assignment: the proposed assignee wants to change the permitted use, the assignee's financial resources or retailing skills are inferior to the outgoing tenant's, the tenant hasn't followed the disclosure procedure in section 41, or, for a lease awarded by public tender, the assignee doesn't meet the tender criteria. The landlord is not entitled to refuse on any other basis. Section 41 also sets a clock running: once the tenant has made a written request and supplied the required disclosure statements, the landlord's consent is deemed to have been given if it hasn't responded within 42 days. Victoria's equivalent regime works the same way in substance, listing the landlord's grounds for refusal in section 60 of the Retail Leases Act 2003 and deeming consent given if the landlord doesn't respond within 28 days under section 61.
Subletting can sit outside that protection entirely
The same statutes treat subleases differently, and often less favourably for the tenant. Under section 63 of Victoria's Retail Leases Act 2003, a retail lease can lawfully give the landlord absolute discretion to refuse consent to a sublease, licence or concession, something the Act does not permit for an assignment. A landlord weighing a sublease request should check the lease itself before assuming the same reasonableness constraints that apply to an assignment carry across; depending on how the clause is drafted, a sublease may be one of the few decisions in a retail lease where the landlord's say genuinely is final.
Outside retail leasing, "reasonable" is a case-by-case test
General commercial leases, such as most office and industrial premises, aren't covered by a state retail leases act. In New South Wales, section 133B of the Conveyancing Act 1919 implies a proviso into any lease covenant against assigning or subletting without consent: that consent is not to be unreasonably withheld, even if the lease itself is silent on the point. But "reasonable" isn't defined in the section, and courts have generally required a landlord to point to a legitimate commercial concern connected to the tenancy, such as genuine doubt about the incoming party's ability to pay rent or meet the lease's obligations, rather than an unrelated or ulterior motive. The same provision lets a landlord charge a reasonable sum for the legal and other costs of considering the request, provided those costs are substantiated if asked. A tenant who believes consent has been unreasonably withheld can seek a declaration to that effect from the court, so a refusal needs a defensible reason on file, not just a preference.
Two cases that show how this plays out
First Renewable Pty Ltd held a lease over a strata factory unit in St Peters, Sydney, that barred subletting without the landlord's consent. In August 2019 it sublet the unit anyway, without asking, to a company owned and controlled by its own sole director. The landlord, Zoro Nastevski, issued a breach notice; First Renewable neither fixed the breach nor sought consent after the fact, and in October 2020 he re-entered and took the premises back. First Renewable went to the NSW Supreme Court seeking relief against forfeiture, arguing the pandemic's COVID-19 Leasing Regime protected it, and that the landlord had effectively consented by sometimes accepting rent paid directly by the subtenant. The Court rejected both arguments: the COVID-19 regulations shielded tenants only from action over rent and trading-hours breaches, not unauthorised subletting, and accepting a payment from a subtenant wasn't consent to the sublease that produced it. First Renewable lost the unit.
The reverse scenario played out in Exceed Education Pty Ltd (trading as Young Minds Academy) v Sylvester, a 2025 NSW Supreme Court case with a landlord on the losing side. A childcare operator was selling its business for $1.2 million and needed the landlord's consent to assign the lease to the buyer; the lease itself said that consent could not be unreasonably withheld, a term the Conveyancing Act would have implied in any case. The Court found landlords can't use a request for consent as leverage: a landlord isn't entitled to extract collateral advantages or impose conditions that go beyond what the lease already requires, just because a tenant needs its signature to complete a sale. Between the two outcomes sits the practical lesson for both sides: a tenant who skips the consent step has almost no room left to argue about it afterward, and a landlord who tries to extract more than the lease allows in exchange for consent is likely to lose that argument in court.
What to do when the request actually lands
Start by checking which regime applies: a retail shop lease points to the fixed grounds and statutory clock above, while a general commercial lease turns on the lease wording and the reasonableness of the landlord's actual reason. Either way, insist on the request in writing, and ask for the same information the incoming party would need to satisfy a retail leases act test in substance even if it isn't legally required: financial statements, trading history where relevant, and confirmation the proposed use won't change without separate consent. Respond within any statutory or lease-specified timeframe, since silence can amount to deemed consent under a retail lease or strengthen a tenant's unreasonable-refusal claim under a general one. If consent is given, a formal deed recording it, addressing any outstanding breaches, guarantees and, for eligible retail leases, whether the outgoing tenant qualifies for release from future liability under the disclosure provisions, protects the landlord's position far better than a one-line email of approval.