Understanding the New Consent Requirements in Leases

As we’ve written about previously, the new Property Law Act 2023 brings with it some considerable changes to standard leasing practices in Queensland.

From 1 August 2025, those changes come into effect. So, if you haven’t got your head around them yet, then you should.

One set of changes in particular relates to how lessors must consider giving consent to certain requests from a lessee. These new provisions will make a substantial practical difference to the way in which lessors and lessees deal with each other, and so it’s particularly important that any agents, lessors or lessees get some new procedures in place before 1 August 2025.

What’s Changing?

The new PLA brings with it section 142 (or more broadly, Part 9 Division 4) which provides a strict regime for how the lessor and lessee must interact in relation to certain requests made under a lease.

Specifically, the section applies to any situation where a lessee must get the lessor’s consent to assign, sublease, share possession, change the permitted use, create a mortgage over the lease, or conduct works on the premises.

We’ll set out the new procedures in more detail below, but as you’ll notice these are common areas where a lessor typically requires a lessee to get consent before acting, since they impact the premises or the contractual relationship significantly.

Commonly, leases might provide the landlord with “absolute discretion”, so you might be thinking that gets you out of having to worry about the new regime. If that’s you, then you should know…

It’s Irrelevant What your Lease Says

First and foremost: nothing in this article is affected by what your lease says.

The provisions in section 142 of the PLA cannot be contracted out of.

That means it’s irrelevant if your lease contradicts what we’re about to tell you – these provisions of the PLA will apply despite any agreement to the contrary.

What’s the New Procedure?

The new procedure is designed to ensure that lessors engage in fair, reasonable, and timely decision making in response to a relevant lessee’s request for consent.

Here’s how it works.

Lessee Issues a Proposal Notice

First, the lessee gives the lessor a “proposal notice.”

This notice sets out what the lessee is proposing to do, and must include any information that the lease requires as part of any request.

So let’s say the lessee is proposing to sub-let the premises. The lease might require the lessee to provide the identity of the sub-lessee, financial information, references or similar for the lessor to consider its position – that information must be included with the proposal notice.

Lessor Must Not Unreasonably Withhold

Importantly, the PLA now provides that the lessor “must not unreasonably withhold consent”.

Note this is different from “acting reasonably” and actually places a positive obligation on the lessor NOT to withhold its consent unless doing so can be demonstrated to be reasonable.

And as we’ve mentioned above, it’s now irrelevant if your lease says the lessor can give consent or not “in its absolute discretion” – the PLA provisions prevail, and therefore the lessor must not withhold consent unreasonably.

Lessor Requests further Information

In response to a proposal notice, the lessor can request more information if what’s been provided is not sufficient to enable a decision.

Decision Notice

The lessor must give the lessee a “decision notice” within 1 month after receiving full particulars of the lessee’s proposal. The lessor and lessee can agree to extend that time.

So that’s not necessarily 1 month after receiving the proposal notice, but 1 month after receiving “full particulars” which would include any further information the lessor has requested.

The decision notice must point out:

1. If consent is given, what conditions are attached to the consent and the reasons for those conditions – so the lessor cannot just arbitrarily attach conditions without explaining why they exist;

2. If consent is not given, the reasons why.

   
   

Court Application

If the lessee believes the lessor has unreasonably withhold consent, or believes a condition attached to the consent is unreasonable, then the lessee can apply to Court for relief.

The lessee can also apply if the lessor has failed to make a decision within the time required.

The Court can, in response to such an application, make “the orders it considers appropriate”. This is a very wide power, and essentially allows the Court to affirm the lessor’s decision, override it completely, change conditions attached to consent, or do anything else it considers is appropriate in the circumstances.

Notices, Decision Process, Timelines, Reasons

It’s critically important that both lessees and lessors (and their agents) understand the requirements of this new process.

For lessees, to get the most out of the new regime you should ensure that your proposal notice is comprehensive, containing all relevant information the lessor either requires under the lease or is reasonably necessary to make an informed decision about the request. Withholding information will only work against you in the long run, and potentially delay the time in which a decision must be made.

For lessors, any wide discretion that you thought you had about giving consent for these relevant matters has now been removed, and turned into a requirement to “not unreasonably withhold” consent. It’s critically important you comply with timeframes, and offer meaningful reasons for any refusal to consent or conditions you place upon consent. Failing to do so will just expose you to the time and cost of Court applications.

If you need help understanding or complying with these new provisions, don’t hesitate to get in touch with us today.