Business-rented property

ceewash

If selling a business in a rented property are there any costs involved in passing over the lease to the new owner? Who is liable to pay these costs?

Pennywise

ceewash wrote: »

If selling a business in a rented property are there any costs involved in passing over the lease to the new owner? Who is liable to pay these costs?

There will usually be solicitors costs to do the paperwork for reassigning the lease. Who pays is a matter of negotiation between the current lease holder and the potential buyer. There's a lot to say for each party being responsible for their own solicitor's fees, which is usual practice, as you'd usually want separate solicitors as they shouldn't act for two opposing sides - you need your own solicitor to look after your interests and the other party should do likewise.

There'll also be solicitors costs for the transfer of the business itself, i.e. drafting the contract and dealing with indemnities & warranties, so the additional add-ons of the lease re-assignment may not add that much to their bill.

Never a good idea for both sides to use the same solicitor - it's a conflict of interest and most good solicitors would refuse to do it anyway (although some firms deal with it by using different solicitors within the practice using a "chinese wall").

bris

A bit more to it, the property owner may not approve the potential buyer if the covenant is not as good as yours.


The LL already has you so he won't allow the lease to be transferred if the new owner of the business is higher risk, if he does then all his costs would be paid by you.


If he doesn't then your option is to sublet, but that still leaves you liable to the LL if the new owner doesn't pay.