Important Factors to Consider in Your Lease

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 717 words

The lease clauses that matter most are the term and renewal options, your right to assign the lease to a buyer, any exclusivity protection, the personal guarantee, and exactly which costs and repairs fall on you. Get those right when you sign or renew, and the lease supports both the business you run today and the sale you may make later. Get them wrong, and a landlord can hold up a deal you did not know was at risk.

Owners rarely reread a lease after signing it. For a business that depends on its location, such as a showroom, a service shop with a yard or a warehouse near its customers, that is a gamble. Read it, and have a real estate attorney explain anything you do not fully understand.

Term and renewal options give the business stability

A longer term, or a shorter one with renewal options at your choice, protects the site your customers know and the build-out you paid for. It also matters to a buyer: a company with two years left and no right to renew is worth less to someone who needs that site, because they are buying uncertainty. Renewal options that state how the new rent will be set are usually better than a loose promise to negotiate later.

Before you negotiate, decide how much the location itself drives revenue. A business whose customers come to it, or whose equipment is costly to move, needs a long and secure term. One that serves customers at their own sites can accept more flexibility in exchange for better rent.

An exit route and exclusivity protect you from surprises

Stability and flexibility are not opposites. Ask for a termination or relocation right tied to events you can name: a sale, a need for more space, revenue falling below a set level. In a retail center or multi-tenant park, ask for an exclusive-use clause so the landlord cannot rent the unit next door to a direct competitor. Neither is guaranteed, but landlords agree to more than owners expect when the request comes at signing rather than at renewal.

Put every agreed change in the lease itself or a signed amendment. Side letters and verbal promises are easily disputed, especially when the property is sold to a new landlord.

Assignment is the clause a buyer's attorney reads first

Most commercial leases require landlord consent before the lease is assigned or before control of the tenant changes. Check three points:

A clause that treats any change of control as an assignment means even a sale of shares needs approval. Ask for the right to assign without consent to a buyer of the whole business who meets stated financial tests, or at least for consent that cannot be unreasonably withheld, delayed or conditioned.

• Whether consent may not be unreasonably withheld, or is at the landlord's sole discretion
• Whether a sale of the company's shares or membership interests counts as an assignment (a change-of-control clause)
• Whether you stay liable through a personal guarantee after the buyer takes over

Personal guarantees and who pays for what

The guarantee surprises many sellers. A landlord usually cannot stop you from selling the business, but it can refuse to release your guarantee, leaving you responsible for rent under a company you no longer own. Negotiate a release on assignment to a qualified buyer now, while you still have leverage.

Property taxes, insurance, common-area charges, roof and HVAC repairs, parking lot upkeep and damage after a fire or storm all need a named payer in the lease. Vague language turns into disputes, and a buyer who sees open-ended cost exposure will adjust the price or ask for protection in the purchase agreement. Rent increases should be written as fixed steps or a clear formula. For getting contracts and records in order more broadly, see the twelve-month plan to prepare your business for sale.

Where MDR & Associates comes in

When we prepare a business valuation or an opinion of value, the lease is one of the first documents we read, because remaining term, rent and assignment terms change what a buyer will pay. We flag problems early so you and your attorney can deal with the landlord before a buyer is involved. Contact us for a confidential conversation about your company and its location.

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Questions owners ask next

Should I tell my landlord I plan to sell?

Not at the start. Most owners approach the landlord once a buyer is chosen and a letter of intent is signed, with the advisor and attorney guiding the timing. Earlier contact risks a leak and invites the landlord to renegotiate. Read the lease first so you know exactly what consent you will need.

What if I own the building my business leases?

Then you can sell the real estate with the company or keep it and sign a new lease with the buyer. Either way, buyers usually want a market-rate lease with a reasonable term in place. Your CPA and advisor can compare the two routes, including the tax effects, for your situation.