- Who handles it
- Your landlord or property manager, with your attorney
- What gets filed
- A lease assignment or a new lease, plus the landlord's written consent
- Timing
- Ask early, since landlord approval can take weeks, sometimes about two months
Common snag: Staying on the hook. A personal guarantee can survive the assignment unless the landlord releases it in writing.
Why buyers read the lease first
If your customers come to a location, the lease is the asset. A buyer paying for goodwill wants years of right to stay, at a rent they can plan around.
A month to month lease, or one that ends soon, is a red flag. Buyers and their lenders ask for a stable term, and a short one can shrink the price or kill the deal.
Landlord consent is the long pole
Most commercial leases require the landlord's written consent to assign the lease or sublet. Landlords in Dallas area centers often ask the buyer for financial statements and sometimes a new deposit.
Approval can take weeks. In one common pattern it ran about two months. Starting the request after the offer is accepted, not at the closing table, saves the schedule.
Look for wording that says consent cannot be unreasonably withheld. It protects your ability to sell.
Terms buyers push on
- Fixed base rent is easier to value than percentage rent, where the landlord takes a share above a sales level
- Renewal options should state the rate, not just "market at renewal"
- Escalations should be written down, so the buyer can model them
- Below market rent is a perk for you, but buyers underwrite at market rent and may lower their price
Personal guarantees and your exit
Many owners signed a personal guarantee when they opened. Assigning the lease does not always end that duty.
Ask your attorney to negotiate a release from the landlord as part of consent. If the landlord refuses, plan how the buyer will back you up, such as an indemnity or a security deposit.
When the building is yours too
If you own the building, the buyer may want a fresh lease at a fair rent, and you can stay on as landlord. That choice has tax and price effects that are worth a talk with your CPA. Our note on selling the building or staying on as landlord covers it.
Line it up with other filings
The landlord will want proof the buyer can occupy the space, which brings in the certificate of occupancy. Trucks and trailers have their own titling steps.
To see what the location is worth to a buyer, ask for a private price range.
This page is general information and not tax or legal advice. Have your attorney review the lease and any consent before you sign.