The Importance of Leases

It is critical to understand the importance of leases when buying or selling a business. Many savvy business people will treat leases as a secondary concern. They may feel that there are more important issues when buying or selling a business. However, problematic terms in a lease can literally force a business to move. This could be a very costly occurrence.

Many people feel that there are more important issues when buying or selling a business. In this article we will discuss three different types of leases. All three of these options can impact your business in different ways. After reading this article you will understand the importance of leases and see the wisdom of placing a lease near the top of your “to evaluate” list.

New Leases

A new lease is the result of a lease that has expired. What this means is that the buyer will need to work with the landlord to establish a new lease. Buying a business only to discover that you don’t have a lease is a shock that no business owner wants to encounter. Buyers should be 100% certain that they have a lease in place before they buy a business.

Assignment of Leases

The assignment of lease is quite common. The buyer of the business is granted the use of the location where the business is currently located and operating. The seller is able to assign the buyer the rights associated with the lease. He/she is is not acting as the landlord, he/she simply has the ability to assign the lease.


A sublease is a lease within a lease. This type of lease comes with some important distinctions that must be understood. A sublease generally requires the permission of the landlord. Do not view this permission as an “automatic”.

No new business owner wants to discover that his or her new business doesn’t have a home. There are many important issues to work out when buying a business. Don’t overlook the importance of leases. It is critical that buyers know what kind of lease is involved. A seller will inform a buyer of what kind of lease they have. A buyer should always be proactive and ask questions about the status of the lease. Make certain that the lease terms are clearly defined.



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