We're in the middle of selling our retail business and the buyer wants to take over the remaining lease. The lease has about three years left. Our landlord has always been decent but now wants to renegotiate terms, including a higher rent. Has anyone dealt with this directly without a broker? What should I watch out for?
Commercial Lease
Negotiating lease transfers with your landlord directly
Read your lease carefully. There might be a clause about assignment and transfer. Landlords often have the right to withhold consent or charge fees. If the buyer is strong financially, that helps.
I went through this last year. Landlord wanted a personal guarantee from the buyer, which almost killed the deal. We ended up negotiating a smaller deposit instead.
Get everything in writing. Even emails. Verbal promises mean nothing when the deal closes.
Why not use a broker? The cost might be worth it to avoid a mistake. I know some people do it directly to save money, but lease transfers can get tricky if there's a dispute later.
Agree with getting it in writing. Also checkk if the landlord can increase rent upon transfer. Some leases have a clause that allows a bump to market rate. That could be what's happening here.
Also, make sure the buyer assumes all obligations from the date of transfer. You don't want to be on the hook for anything after you sell.
What's the landlord's incentive to agree? If the buyer is a safer bet than you, they might not push for more. But if they think you're desperate to sell, they'll squeeze.
Thanks for the points. I'll double-check the assignment clause and see if there's a rent adjustment provision. We have a meeting with the landlord next week.
One more thing: ask for a written consent to assignment that explicitly releases you from liability. Some landlords will try to keep you on the hook