Commercial Lease Assignment When Selling Your Business: Problems

Commercial Lease Assignment When Selling Your Business by Neal Isaacs Commercial Lease Assignment When Selling Your Business: Problems As part of selling your business, the lease can be one of the most overlooked barriers to completing the deal. The buyer and seller may have a “meeting of the minds” when it comes to the lease, but if it isn’t assigned they have nothing to buy or sell. Let’s explore a few of the common issues that come up related to a lease in the sale of a small business. Inadequate Time Remaining on the Lease Ideally, a tenant should sell a small business with more than three years left on the lease. The takeaway here is the longer the better. It’s not uncommon for me to meet a seller who is going “month-to-month” on a lease and proud of it. In their mind they’ve reduced their commitment to the business, but in the buyer’s mind one of the largest expenses of the business is unsecured and at risk of inflation. The bu...