Why Your Lease Could Make or Break the Sale

When selling a business, most owners think about their financials, operations, or finding the right buyer. But there’s one factor that can quietly determine whether your deal closes or collapses: your lease.My colleague, Allura Engel, recently wrote about how landlords often have the power to kill deals, and how they sometimes use that leverage to delay, demand, or derail transactions. If you missed it, you can read her article here: Wait—My Landlord Can Kill My Deal? Yes, and They Often Do.

In this article, I’ll take that conversation a step further. Instead of focusing on the problem, let’s talk about how sellers can prepare their lease before going to market so the landlord doesn’t hold all the cards.

Why the Lease Matters So Much

Your lease is more than a piece of paper — it’s one of the most important assets in the sale of your business.

• Buyers want stability and security.

• Lenders (especially SBA lenders) require the lease to last longer than the loan term.

• Without a strong lease, even a profitable business can become nearly impossible to sell.

The Most Common Lease Problems

Allura highlighted the traps that derail deals. Here are the big ones:

• Landlord veto power – most leases require consent, giving landlords leverage.

• Short terms left – less than 2–3 years makes buyers and lenders nervous.

• Restrictive assignment clauses – “sole discretion” gives landlords too much control.

• Personal guarantees – often a deal-breaker for buyers.

• Rent escalations – hidden increases that destroy deal economics.

How Landlords Can Derail a Sale

Landlords may:

• Delay approval to pressure better terms.

• Demand higher rent, deposits, or guarantees from the incoming buyer.

• Refuse consent if they don’t like the buyer.

• Use the sale as an excuse to renegotiate the entire lease.

How Sellers Can Prepare

Here’s how to protect your deal before it’s even on the market:

1. Review your lease now — don’t wait until you’re under contract.

2. Negotiate renewals/extensions — ideally 5+ years of term or options.

3. Add “reasonable consent” assignment language instead of unlimited landlord discretion.

4. Build goodwill with your landlord — communication matters.

5. Get professional help — brokers and attorneys can flag and fix risks early.

Why Buyers & Lenders Care

To buyers, the lease is part of the asset they’re buying.
To lenders, it’s a safeguard that the business will remain stable during the loan.
A strong lease builds confidence, reduces delays, and can even increase the value of your business.

Landlords can and do kill deals — but sellers who prepare their lease early keep control of the process.

If you’re considering selling your business, don’t wait. Review your lease today, address weak points, and ensure it supports your exit goals.

At EDGE Business Advisors, we help business owners identify and resolve lease risks before they ever go to market. Contact us for a confidential consultation.