If you lease your property, how you approach the sale will depend on your current lease, your landlord and the relationship you have.
If you are going to be leasing the property yourself, your buyer will look for a longer lease, ideally of at least ten years, and will need this to secure finance. Providing this length of lease will make it easier for them to secure finance and for you to achieve the asking price.
If you have a commercial landlord, such as a property company with multiple tenants, or you lease from the council, they are more au fait with a change of tenants, so your buyer can easily approach them as part of the transaction with the view of having a new full lease issued directly to them. As part of this, you would surrender your lease, and all liabilities you have for it would cease on completion.
If you have an individual landlord that you get on well with, then take the same approach as with a commercial landlord, as they would likely be happy to allow you to surrender your lease and issue a new one to the buyer.
If, however, you are not sure your landlord will be helpful, then it is best not to advise them of the sale. This may be because you are worried that they could increase the rent or expect a financial incentive to allow you to surrender and then create a new lease.
In these circumstances, it’s better to ensure that the current lease would be suitable for the incoming purchasers, so it has at least ten years left at the point of completion, and you are able to reassign it to the new buyer without the explicit consent of the landlord.
Many settings have shorter leases and it is not uncommon for leases to be informal rolling agreements rather than fixed longer term. This can affect the value of the business as even a very profitable setting may struggle to find support from a lender when there is a very short security of tenure.
In these cases, we advise looking at this several years prior to sale to give you a chance to maximise your value and secure the best deal for you when the time comes.
