The Landlord and Lease Contingency in Selling a Business
Updated August 2026
In this article:
Clear A New Lease With The Landlord Before You Sell Your Business.
A lease is a contract that represents the right to operate a business from rented premises. It is a legally binding contract between the landlord and the tenant. It sets out the terms, conditions and rights as well as the obligations of both parties in relation to the occupancy.
Before selling a business, make sure the lease can be transferred or renegotiated. You want to get this part of the sale process done relatively early.
Selling or acquiring a business is one of the most consequential financial decisions you’ll ever make. You deserve guidance from a team with a proven track record, not a firm still learning the ropes. At Certified Business Brokers, we have been shaping the business brokerage profession since 1974, making us one of the oldest and largest firms of our kind in the country. Interested in buying or selling a business? Contact us to see how we can seamlessly guide you through the process.
Keep the Landlord in the Loop and Work Out Details
Landlords don’t like surprises.
A deal can fall apart quickly if a landlord is informed at the last minute that a new owner is about to take over the current business. It is better to work with the landlord to iron out the details before you get too far into the deal. Determine the landlord’s willingness to renew or transfer the lease to a new owner and what qualifications are expected of a new owner.
Also of importance is how much time is remaining on the lease and whether there are any extension periods. The purchaser would want to evaluate the lease to determine what impact it might have on the future viability of the business.
The Lease Can Make or Break the Sale of a Business
The lease terms of the business space can be a major consideration for a buyer.
For example, a distribution company with a long-term lease on a good location can be attractive. But a long-term lease on a business needing more space to grow could be a detriment.
Or, there can be concerns about an expiring lease when the landlord might demand a large increase. When it comes time to negotiate a new lease, business owners must carefully think through the timing of their plans for exiting their business.
CBB Has a Team of Experienced Experts Ready to Help You
If you’re considering buying or selling a business, you have a lot at stake. You don’t want to trust the process to just anyone. You need a team with experience and a proven track record of success.
Reach out to Certified Business Brokers today to start a conversation about your goals. With over five decades of trusted results behind us, we’re ready to assist you.
Key Takeaways:
- A commercial lease is a legally binding contract that must be reviewed and addressed early in the business sale process.
- Sellers should confirm whether their lease can be transferred or renegotiated before listing the business for sale.
- Informing the landlord early and understanding their willingness to work with a new owner helps prevent deals from collapsing late in the process.
- The amount of time remaining on a lease, along with any extension options, directly affects a business’s future viability for a buyer.
- Lease terms can either strengthen or weaken a sale, depending on factors like length, location, and the buyer’s growth needs.
- Business owners should factor lease negotiation timing into their overall exit planning strategy.
- Certified Business Brokers has over five decades of experience guiding both buyers and sellers through these transitions.
