A problematic term in a lease can force you to pack up a business and move. Finding a good location is of paramount importance to both the profile and profitability of your business. You may feel that there are more important issues when buying or selling a business. But by the end of this article, you’ll see the wisdom in placing a lease near the top of your “to evaluate” list.

There are three different kinds and types of leases: a new lease, an assignment lease and the sublease. All three of these options are most definitely different from one another. It can potentially impact your business in different ways.


The New Lease

A new lease is the result of a lease that has expired. So it’s important to work with the landlord to establish a new lease. If you don’t have a lease, it can be difficult to keep your business at its current location. Landlords aren’t always interested in keeping your business around. Make sure that everything is in order before you buy.


Assignment of Lease 

The traditional lease is pretty straightforward – it’s when you agree to rent a property for a specific amount of time. The assignment of lease, on the other hand, is a little less common but can be very beneficial for both the buyer and seller of a business. With an assignment of lease, the buyer is able 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, though it’s important to keep in mind that the seller isn’t acting as a landlord but instead simply has the ability to assign the lease.


The Sublease 

 The sublease, for example, is a lease within a lease. It comes with some important distinctions that you need to understand. The permission of the landlord is a requirement in a sublease. That permission should not be viewed as a “foregone conclusion” or “automatic.”


Business owners should make sure they understand all the different types of leases available to them, as each one has its own benefits and drawbacks. Seeking professional advice is always a good idea, and it can help ensure that you make the best decision for your business.

No new business owner wants to find out their new business doesn’t have a home. There are a lot of things to work out when buying a business. It’s critically important that buyers never overlook what kind of lease is involved. A savvy seller will highlight what kind of lease they have, especially if the terms are favorable. On the other hand, buyers should always be proactive. Always ask questions about the status of the lease and define clearly certain lease terms.

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