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You can sell a business involving a commercial lease with the landlord's consent and the new owner must agree to the lease terms set by the landlord.

Selling a business with a commercial lease requires careful planning, thorough preparation, and effective communication with all parties involved.

Engaging highly experienced commercial lease solicitors can provide valuable support and help mitigate potential risks.

To get legal assistance with selling your leasehold business, call our commercial lease solicitors today at 0203 959 7755 or email us at: info@moeenco.com.

Table of Contents

What is a leasehold business?

A leasehold business is a business that operates from a property rented under a commercial lease agreement. The owner signs a commercial lease with the landlord to use the property for a set time.

The owner doesn't own the property. Instead, they lease it from a landlord. This is common for shops, offices, and restaurants.

When someone starts a leasehold business, they sign an agreement with the landlord. This commercial lease agreement outlines the terms and conditions of the lease, including rent, lease duration, maintenance responsibilities, and other important provisions.

Can you sell a leasehold business?

You can sell a leasehold business. However, you will need to obtain the landlord's consent for the lease assignment or transfer.

The new owner must agree to the lease terms and meet any conditions set by the landlord.

What to consider when selling a business with a commercial lease?

When selling a business with a commercial lease, legal issues are key. Addressing these legal considerations is vital for a successful sale. Key steps include getting the landlord's consent and working with expert commercial lease solicitors.

  • Review the Lease Agreement
  • Obtain Landlord's Consent
  • Financial Considerations
  • Legal and Compliance
  • Engage a Commercial Lease Solicitor

Review the Lease Agreement

Begin by carefully reviewing your commercial lease agreement. Pay close attention to any clauses or provisions related to lease transfers or assignments. Familiarise yourself with the specific requirements outlined in the contract.

Some commercial leases explicitly allow or prohibit assignments, and transfers, or require the landlord's consent.

Formally request the landlord's consent in writing, providing details about the proposed new tenant.

Obtain the landlord's consent before proceeding with selling your business to avoid any legal complications.

Getting the landlord's consent is vital. The landlord has the final say about the lease transfer. If they don't agree, the sale can't happen.

It's important to talk to the landlord carefully. They may have certain terms that must be met. Using a skilled solicitor can help handle these talks well.

Financial Considerations

Get a professional valuation to accurately determine the worth of your business, including the value added by the lease.

The value of a leasehold business can be influenced by various factors, including location, lease terms, financial performance, industry trends, and assets.

You need to think about any security deposits held by the landlord and how these will be handled during the transfer.

You should also review the current rent, any upcoming rent increases, and additional costs such as maintenance and utilities.

Draft a comprehensive sale and purchase agreement that covers all aspects of the transaction, including the transfer of the lease. Make sure that the agreement is legally sound and protects your interests.

Allow the buyer to conduct a thorough due diligence process. This includes reviewing financial records, inspecting the premises, and verifying compliance with lease terms and regulations.

Engage a Commercial Lease Solicitor

Engaging the services of experienced commercial lease solicitors is important to ensure all legal considerations are addressed and the sale is legally correct.

Our commercial lease solicitors provide legal advice on the lease terms and conditions, ensuring you understand your rights and obligations.

Setting up the right documents is key when selling a business lease. Our solicitors can draft and review the legal document, ensuring the business sale is legally sound and protects your interests.

How to sell a business with a commercial lease?

Selling a business with a commercial lease involves several steps and considerations, especially regarding legal aspects and the lease agreement.

Selling a business with a commercial lease involves several steps, such as:

  1. Valuation of the Business
  2. Preparing Financial Documents
  3. Finding a Buyer
  4. Landlord's Consent
  5. Legal Documentation
  6. Due Diligence
  7. Completion

Valuation of the Business

Determine the value of your business. Look at market trends and the company's assets. A valuation by a professional will give you a clear idea of your business's worth.

A business valuation expert will help you to determine the worth of your business, including tangible and intangible assets, liabilities, and the value of the lease.

Preparing Financial Documents

You make sure that your financial records are accurate and up to date, as potential buyers will need to review these.

Gather your financial records which include profit and loss statements, balance sheets, and tax returns. Having this information ready helps buyers see your business's financial health.

Finding a Buyer

List your business for sale through business brokers, online platforms, and industry networks.

Start negotiating with potential buyers once offers come in. Look at each offer carefully. A business broker or solicitor can help you get the best deal.

Review your commercial lease agreement carefully and formally request the landlord's consent for the lease assignment, as required by the lease agreement.

Get help from a solicitor to make the legal documents. This includes the sale agreement and lease transfer. Make sure all legal steps are correct for the sale.

Due Diligence

Be ready for the buyers to check everything in due diligence. Provide all necessary documents quickly. This helps buyers trust your business.

Completion

Close the sale once everything is ready. Sign the agreement and transfer the lease.

Ensure a smooth handover of the business operations and assets to the new owner.

Selling a business with a commercial lease requires careful planning and legal expertise. Engaging a commercial lease solicitor can simplify the process, providing you with the necessary legal guidance and support to ensure a successful sale.

If questions come up or you need help, get in touch with us at Moeen & Co. Solicitors. Call us today at 0203 959 7755 or fill in our online contact form.

Obtaining consent from the landlord can sometimes be a complex process, as they may have certain conditions or restrictions.

It is essential to obtain the landlord's consent before proceeding with the lease transfer to avoid any legal complications.

This may involve submitting financial information about the new tenant. The landlord may require a credit check, financial statements, and other documentation to approve the new tenant.

Getting lease transfer approval follows these steps:

  • Tell the landlord: The current tenant must share plans to sell and transfer the lease.
  • Show documents: The new owner must give the landlord financial info, plans, and references.
  • Discuss changes: The landlord and new tenant might need to talk about any lease tweaks.
  • Get consent: With everyone on board, the landlord signs off on the lease change.

What costs are involved in selling a business with a commercial lease?

Costs may include business valuation fees, solicitor's legal fees for drafting and reviewing documents, potential lease assignment fees, broker commissions, and any costs associated with meeting the landlord's conditions for assignment.

How long does it take to sell a commercial lease?

Generally, the process of transferring a commercial lease to a new owner can take anywhere from 6-8 weeks.

The time it takes to transfer a commercial lease can vary depending on several factors, including the complexity of the lease, the responsiveness of the involved parties, and any legal or financial reviews required.

Understanding how to sell a business with a commercial lease can be tricky. Moeen & Co. Solicitors specialises in these matters. We're experts in both commercial property and business transfers.

Our legal professionals have many years of experience. We know all about selling business leases. We offer advice that fits each customer's specific needs, making the sale smooth and successful.

We always work closely with our clients, giving them important tips and practical help. We cover everything needed to sell a business with a lease, from dealing with the landlord to making sure the business changes hands without a hitch.

We really care about getting the best results for our clients. Our detailed work, proactive methods, and deep understanding of the law make us stand out.

If you're thinking of selling your business with a commercial lease, reach out to us at 0203 959 7755. Let us use our skills and knowledge to help you. We'll make sure the sale goes well and the changeover is smooth for everyone.

Contact a solicitor to sell a business with a lease

If you want to sell your business with a lease, call our commercial lease solicitors today at 0203 959 7755 or email us at: info@moeenco.com.

Our team of commercial lease solicitors provides services throughout England & Wales and can assist you with all your legal needs.

There are several ways to contact our solicitors based in Hayes, London:

We are located near Hayes and Harlington Station on Hayes High Street, in Hayes Town Centre. 

FAQs: Selling a business with a commercial lease

You should disclose all pertinent information about your current commercial lease agreement.

It includes the rent amount, lease duration, renewal options, maintenance responsibilities, and any other terms that could affect the business operations.

Things to think about when selling such a business include the lease's time left, if the lease can be transferred, and any lease rules.

You also need to look at the overall market and how this sale will affect employees and customers.

The business's worth considers its profits, market, location, and the lease's time left. Ways to value include its income and assets. These methods help figure out a fair price.

Lease assignment is when a business lease passes from one tenant to another. The seller needs the landlord's agreement. An assignment agreement sets out the lease transfer's details.

It is highly recommended that you hire an experienced commercial lease solicitor for the sale of your leasehold business.

Commercial lease solicitors can provide expert legal advice, draft and review documents, negotiate with landlords and buyers, and ensure that all legal aspects of the lease assignment and business sale are properly handled.

Looking for a solicitor?

If you need legal advice or assistance with your legal matter, speak to our lawyer today.