NOT FOR A RETAIL LEASE!

For a retail lease to be registered the consent of the mortgagee is required. In providing consent, the mortgagee will charge a consent fee. The lessor is solely responsible for paying the full costs of this mortgagee consent fee. Hence, a lessor cannot pass this fee onto you.

If the lessor asks you to pay the consent fee you should refer them to section 14 of the Retail Leases Act 1994 (NSW) (‘the Act’). This section explicitly prohibits a lessor from seeking payment of ‘lease preparation expenses’ which includes ‘expenses incurred in connection with obtaining the consent of a mortgagee’ (see section 3 of the Act). In other words, the lessor cannot request the mortgagee consent fee to you. If they do, they will be guilty of an offence and liable to a penalty of up to 100 penalty units (see section 14(2) of the Act).

The only time a lessor can seek a ‘lease preparation expense’ from you is if the expense has been incurred in connection with making an amendment requested by you (see section 14(4) of the Act).