Lease Assignment and Landlord Consent: The Overlooked Step

If you don't own your building, your landlord has more say over your sale than most owners expect — and if you personally guaranteed the lease, that guarantee may not disappear just because you've sold the business.

Most restaurant leases include a clause requiring the landlord's written consent before the lease can be assigned to a new tenant. This means your buyer isn't just negotiating with you — they're also, in effect, negotiating with your landlord, whether or not anyone frames it that way upfront.

Why this catches people off guard

Owners often assume that once a purchase agreement is signed, the lease "just comes with" the sale. In practice, the landlord can review the buyer's financials, require a personal guarantee from the new owner, negotiate new rent terms as a condition of consent, or in some cases decline to consent altogether — particularly if the lease is below current market rent and the landlord would prefer to reset it with a new tenant.

The personal guarantee problem

If you personally guaranteed the original lease — extremely common for independent restaurants, especially older leases — that guarantee generally does not automatically end when you sell the business. Unless your landlord specifically agrees in writing to release you, you could remain on the hook for that lease's obligations even after you no longer own the restaurant, if the new owner later defaults.

What to do early, not at the last minute

• Read your current lease's assignment clause well before you're in active negotiations — know what consent is actually required and on what terms.
• Loop your landlord in early once a sale looks likely, rather than surprising them near closing — landlords who feel ambushed are more likely to slow-walk or complicate consent.
• Make lease release for your personal guarantee a named condition of closing, not an assumption — put it in writing in the purchase agreement.
• Build realistic time into your closing timeline for landlord review and negotiation — this can take weeks, especially if new terms are being negotiated alongside the assignment.