Buying a business in rented premises: what to check in the lease before you pay
By Grig Kochedykov · . Legal points read on the official sites on the dates listed under sources; the Victorian case is from the Victorian Small Business Commission's case studies page.
Many small businesses for sale trade from premises the seller rents. When you buy one, you buy the right to stay there only if the lease comes with it. The lease decides how long you can trade at that address, what you will pay, and whether the landlord has a say in the sale.
So read the lease before you pay, not after. Below: what to read in it, how the landlord's consent works in four countries, and the questions to send.
In short: four things before you pay
- Get the whole lease, with every later change, and read the assignment clause word by word. Assignment means the lease passes from the seller to you, on the same terms.
- Count the years left, and check whether the lease can be renewed.
- Get the landlord's answer on the transfer in writing before the money moves.
- Budget for a bigger deposit or a guarantee: the landlord may ask you for more than the seller gave.
General information, not legal advice. The rules below are examples from four countries. Your lawyer reads your lease under the law of the place where the business is.
What to read in the lease
| In the lease | What to look for | Why it matters to you |
|---|---|---|
| Term | the end date, and any right to renew | a business with 18 months left is a different purchase from one with 10 years |
| Assignment clause | whether the lease may pass to a buyer, and on what conditions | this clause decides whether the seller can hand it to you at all |
| Use clause | what the premises may be used for | a café lease may not allow a bar or a kitchen with an extractor |
| Rent and rent reviews | the rent today, and when and how it can rise | a sale can trigger a rise, as in Spain below |
| Guarantees and deposit | what the seller gave the landlord as security | the landlord may ask you for the same or more |
| Arrears | whether the seller owes rent | unpaid rent can give the landlord a ground to end the lease |
A listing usually gives the rent and sometimes the years left. It rarely quotes the assignment clause. Ask for the whole lease, not a summary of it.
The landlord's consent, in four countries
| Country | What the law says | Source |
|---|---|---|
| England and Wales | Where the lease says consent "is not to be unreasonably withheld", a landlord who receives the tenant's written request must answer "within a reasonable time", give consent unless refusing is reasonable, and give the reasons for a refusal in writing. If it comes to a dispute, the landlord must show the refusal was reasonable | Landlord and Tenant Act 1988, s 1 |
| France | A clause that forbids the tenant to assign the lease to the buyer of the business is "réputée non écrite": treated as if it were not written. Article L145-16 says nothing about other conditions, such as the landlord's approval or a set form of notice; ask your lawyer whether they bind you. If the seller guarantees you to the landlord, the landlord can rely on that guarantee for three years from the assignment | Code de commerce, L145-16 and L145-16-2, as quoted in chapter 4 of Buying a Small Business in France |
| Spain | For business premises, the law lets the tenant assign the lease when it sells the business, lets the landlord raise the rent by 20 %, and requires notice to the landlord within one month. But leases other than housing follow what the parties agreed first, and the law only fills the gaps. If the contract forbids assignment and the sale goes ahead, the landlord can end the lease | Ley de Arrendamientos Urbanos, arts. 4.3, 32 and 35 |
| Australia, New South Wales | For a retail shop lease, the landlord may refuse only on the grounds the Act lists, including that your "financial resources or retailing skills" are "inferior" to the seller's. The request goes in writing. The landlord has 28 days to decide, and silence after a proper request counts as consent. The landlord may not charge "key-money" (a payment for agreeing) for consent, but may ask for a bond or guarantee | Retail Leases Act 1994 (NSW), ss 39–41 |
The four rules differ, but the first step is the same: get the landlord's answer in writing, early. The seller asks the landlord in writing, and you give the seller what the landlord needs to judge you: your accounts, your experience, your plan for the premises. In England and Wales and in New South Wales the clock runs from the written request.
A real case: consent, at a price
The Victorian Small Business Commission publishes short cases from its mediations. In one, a company sold its business on the condition that the lease passed to the buyer. The buyer was also a company, but its directors "do not have the same assets behind them" as the seller's. The landlord refused consent "on the basis that the proposed tenant does not have sufficient financial resources to meet the obligations of the lease."
At mediation the landlord agreed, on one condition: the "security deposit be increased from 1 months rent to 6 months rent, via a bank guarantee" (a bank guarantee is your bank's promise to pay the landlord if you do not). The seller agreed to pay for preparing the guarantee, because the sale had been based on an unchanged lease.
So the deal went through, but the buyer needed five more months' rent in a bank guarantee on day one. If your budget has no room for that, the landlord's consent can stop the deal as surely as a refusal.
What to ask the seller, in writing
- Please send me the whole lease, with every variation and side letter.
- When does it end, and is there a right to renew?
- What does the lease need for it to pass to me, and when will you send the landlord the request?
- What security did you give the landlord: deposit, bank guarantee, personal guarantee?
- Are you up to date with the rent and the service charges? Has the landlord sent you any notice?
Keep the answers. Then put the transfer of the lease in the purchase contract as a condition, with a date, so that the money does not move until the landlord has answered.
Before any of this: the listing
A listing for a business in rented premises may give the rent and leave out the rest. Our free extension for Chrome and Edge reads a business-for-sale listing. "Open a business-for-sale listing and press “Download PDF”. You get a report on the 12 things a check of the business needs: what the listing says about each, and which ones it does not say." Two of the twelve lines are the rent, and how long the lease runs and whether it passes to you. "The extension does not guess: when the page is not clear, the line says “not stated”." Each "not stated" is a question for the seller.
Your next three steps
- The extension. Add to Chrome — free or Add to Edge — free. Reading on your phone? Open this page on your computer. More on our extension page.
- Your account. "Saving a listing takes a My list account. In it, the listings you save from different sites sit in one place." Create my account.
- The check, for the business you would put a deposit on. From our pricing page: "€550: from the public records, which debts can follow the business under the rules that apply where it is, and what decides whether the permit and lease pass to you". It needs "enough to identify the business — its legal name, its registration or tax number, or its trade name and town." Start for €550. "€950: everything in the €550 report, plus the seller's figures checked against the seller's own papers — tax returns or the accounts the company filed." Start for €950. "Your report comes in your language: any of 181, chosen on the order form." "We do not contact the seller." "You pay only if we take it on." Within 12 weeks of receiving the €550 report, pay the price difference for the €950 report: what you paid counts in full.
Sources
- Landlord and Tenant Act 1988, section 1 (legislation.gov.uk) (retrieved 2 November 2026)
- Ley 29/1994, de Arrendamientos Urbanos, articles 4, 32 and 35, consolidated text (BOE) (retrieved 4 September 2026)
- Retail Leases Act 1994 (NSW), sections 39, 40 and 41 (NSW Legislation) (retrieved 28 September 2026)
- Victorian Small Business Commission, Case studies: Refusing to consent to an assignment of a lease (retrieved 28 September 2026)
- Buying a Small Business in France, a book by Grig Lien, chapter 4 (Code de commerce, articles L145-16, L145-16-1 and L145-16-2) (retrieved 2 November 2026)
- Provenance Diligence, Free extension (retrieved 2 November 2026)
- Provenance Diligence, Pricing (retrieved 2 November 2026)