Topic:        Liability assumption & transfer

Visitor Comment:

The lease may have a clause which prevents transfer and/or sub-leasing. You should review the existing lease, contact the landlord, and identify your plans for the operation.

Your contract to purchase the business should specify precisely that the existing lease will transfer or be terminated. Obtain written proof of this from the landlord before signing a purchase agreement covering the business.

There will need to be some form of transfer of the lease liability. If you choose to transfer or sublease, you will need to reassign the lease liability with a written agreement and the landlord's active participation.

You may be able to negotiate better terms on a new lease. Work with the landlord to identify a potential better deal for you which meets your start-up time, responsibilities, and the landlord's provision of items such as build-out, maintenance, utility payments, and other variables typically in a commercial lease.

You should want to inform and work with the landlord to transfer this contractual liability thereby ensuring that all restrictions, requirements, and details related to your lease are understood by you before you purchase the business. By being open and following this open course you will learn about each and all of your new liabilities, what you cannot do in the space, and what the terms of the lease are.

You landlord is actualy a partner in your business' operation. He must provide all you need and expect as specified in your lease in order for you to operate your business smoothly on a daily basis.

Your contact with the landlord is your opportunity to verify that this landlord appears to be able to perform as you expect. This will minimize your potential costs and problems.