You’ve spent years building your business. You’ve found a qualified buyer. The offer is signed, due diligence is underway, and closing is in sight.
Then, out of nowhere, the deal stalls. Or worse, dies.
And the reason?
Your landlord.
This is one of the most unexpected and gut-wrenching parts of selling a business. Most business owners have no idea that the landlord can bring the entire deal to a screeching halt—and unfortunately, we’ve seen it happen more times than we can count.
A lot of business owners believe the assignment clause in their lease gives them the right to sell the business and transfer the lease to the buyer.
In reality?
That clause usually gives the landlord the power, not you.
“Tenant may assign the lease with the landlord’s prior written consent.”
Sounds fine, right?
But legally, this means the landlord has the final say. They can say no. Or say yes, but only with conditions. Or they can take weeks or months to decide. In the meantime, your deal hangs in limbo. Or dies.
It’s one of the biggest surprises for first-time sellers, and one of the top reasons deals fall apart.
In many cases, the first time an owner realizes their landlord has any control over the sale is after they’ve accepted an offer. That’s when the broker or the buyer’s lender says, “Now we need the landlord’s approval for the lease assignment or a new lease.”
Cue confusion:
“Wait, I need my landlord’s permission to sell?”
“They’ve always liked me. It won’t be a problem.”
“This is just paperwork, right?”
Unfortunately, no. If your business depends on a physical location, the lease is part of the deal, and landlords can deny, delay, or demand whatever they want. And they do.
Some landlords kill deals on purpose. Others do it through neglect or bureaucracy. Either way, it’s the seller who suffers. Here are the most common ways deals die:
Unresponsiveness: The landlord simply doesn’t reply at all or fast enough. Lenders and buyers get nervous.
New Lease Games: Instead of assigning your current lease, they force the buyer to sign a new lease with worse terms.
Last-Minute Surprises: They ask for a rent increase, personal guarantee, or six months of deposits, late in the process.
Rejecting the Buyer: They say the buyer isn’t qualified, even if they’re stronger than the seller.
Using It As Leverage: Some landlords take the opportunity to renegotiate terms or clean house.
If you’re even thinking about selling your business, get ahead of this. Here’s what we recommend at EDGE:
Review Your Lease Today
Talk to Your Landlord Early
Let them know you’re planning to sell. Ask them how they typically handle lease assignments or new tenants. Gauge their openness.
Secure a Lease Option or Addendum
If possible, negotiate something that gives the buyer more certainty, like a pre-approved assignment clause or lease extension.
Don’t Assume Anything
Even “friendly” landlords can become deal obstacles when control, money, or risk are involved.
Buyers: don’t get so focused on financials that you ignore the lease. A great deal with no place to operate is no deal at all.
Make sure you:
Understand the lease terms
Are prepared to present your financials and background
Know what kind of lease assignment or new lease you’ll need
Don’t delay engaging the landlord
You wouldn’t leave taxes, financials, or due diligence to chance. Don’t ignore the lease. At EDGE Business Advisors, we help our clients navigate this hidden pitfall early, before it becomes a deal killer. If you're planning to sell, let’s talk. We'll review your lease, advise you on what to expect, and make sure you're not blindsided when it matters most.