Commercial Lease Assignment When Buying a Business in BC

Buying a business does not, by itself, give you the seller's right to occupy its premises. The lease has its own transfer rules, and a landlord's willingness to consider you is different from an effective assignment. Before you commit to the purchase, establish what transaction the lease permits, what the landlord must receive, and which signed documents and payments make the consent effective.

The most useful application is not the largest folder. It connects the proposed buyer, the intended operation and the financial evidence to the actual lease clause. It also leaves a clear record of what is still unresolved. A landlord can have enough information to assess the buyer while the parties are still negotiating a deposit, a guarantee or the seller's release.

Find the transfer route before sending an application

Read the executed lease together with amendments, exercised renewal documents, previous assignments, guarantees and relevant side letters. Confirm the premises, the current legal tenant, the landlord and the term that remains. A seller's summary that there are “five years left” is not a substitute for an effective renewal or extension.

Then classify the deal. An asset purchase that replaces the tenant may require an assignment. A share purchase may leave the tenant corporation in place but still trigger a lease's change-of-control provision. A sublease leaves a different relationship between the original tenant, the new occupant and the landlord. A proposed new lease must be assessed on its new terms; it is not merely another name for consent to the existing lease.

An actual historical example shows why the wording matters. The February 5, 2016 lease for Aquinox Pharmaceuticals (Canada) Inc. at 887 Great Northern Way, Vancouver, requires prior written landlord consent under section 9.1 and identifies transfer information to be supplied. Schedule 3 defines “Transfer” to include changes in control and amalgamations; its control definition has an exception for trading in shares listed on a recognized stock exchange. These are terms of one actual contract, not a rule that every BC share sale needs consent or every landlord must approve a buyer. Aquinox Vancouver lease, section 9.1 and Schedule 3.

Look for a right to terminate or recapture the premises when an assignment is requested, as well as restrictions on use, further transfers and alterations. Vancouver's commercial lease negotiation guide specifically warns that an assignment request can engage unfavourable provisions in some leases. Establish the consequences of making the request before treating the application as routine administration. City of Vancouver, commercial lease negotiation guide, page 4.

Build an application the landlord can actually assess

Identify the recipient authorized to process the request and the person or entity whose consent the lease requires. A property manager may assemble the file without having authority to bind the landlord. Record the clause's submission requirements separately from additional information requested during review. This makes it possible to answer a new question without repeatedly circulating the whole transaction file.

Start with the incoming tenant's exact legal name, proposed signing authority and relevant operating experience. Explain whether the business will continue in the same form or change its hours, deliveries, equipment, staffing or services. A recognizable business name is not the legal tenant, and “same use” is not enough if the buyer intends a materially different operation.

Financial material should identify its period, source and purpose. A dated statement of available funds supports a different question from historical operating results or a forecast. Show how acquisition funding, any required security and working capital fit together without presenting borrowed acquisition proceeds as unrestricted cash. If the landlord requests a proposed guarantor's information, identify the request and the secure delivery arrangement; do not quietly substitute a general promise that an owner will “stand behind” the lease.

Use a controlled attachment index. For each document, show the version, date supplied, intended recipient and whether it has been received, queried or superseded. An uploaded document has not necessarily been accepted. Sensitive bank statements and personal financial information should go through a verified, appropriately restricted channel, not as permanent attachments to a cover letter forwarded to everyone involved in the sale.

The landlord application index and cover-letter example provides an editable starting point. It includes a request log, an unresolved-conditions section and a separate record for confidential attachments. The letter requests consideration; it does not purport to exercise a lease right, amend the purchase agreement or create landlord consent.

Read the conditions, not just the word “approved”

Separate approval of the buyer from the terms on which the landlord is willing to proceed. Proposed conditions might concern additional security, a guarantee, insurance, arrears, a permitted-use amendment or execution of an assignment and assumption agreement. A requirement for a new lease can change the remaining term, renewal rights, rent and repair obligations.

Put each proposed change beside the existing lease provision. Label it as an upfront cash payment, a recurring operating cost, a continuing liability or an operational restriction. They affect the purchase differently. A refundable deposit ties up cash; a non-refundable review fee is a transaction cost; a guarantee is a contingent exposure rather than another cheque of its stated maximum amount at closing.

BDC recommends understanding the full cost and responsibility package before signing a commercial lease, including incidental costs, improvements and renewal terms. Apply that discipline to the landlord's consent documents too. The business price has not necessarily changed, but the buyer's total commitment may have. BDC, negotiating a commercial lease.

A deposit can be counted twice if the payment route is unclear

Suppose, purely as an illustration, the landlord holds a confirmed $12,000 seller deposit and requires $24,000 security after assignment. Assume there are no deductions or arrears and the quoted review cost is $2,000 in total. These are invented amounts, not standard BC charges.

Under one documented arrangement, the existing $12,000 remains with the landlord and is credited to the buyer's security account. The buyer reimburses the seller $12,000 through the agreed closing adjustment and sends a $12,000 top-up to the landlord. Including the review cost, the buyer needs $26,000: $12,000 + $12,000 + $2,000.

Under a different arrangement, the landlord returns the old $12,000 directly to the seller and the buyer supplies the full new $24,000. The buyer again needs $26,000 including the review cost, but pays no deposit reimbursement to the seller. Paying the landlord $24,000 and also reimbursing the seller $12,000 would produce $38,000 of buyer payments and duplicate the old deposit in this example.

Neither route is automatic. Confirm the actual deposit balance, deductions, ownership, credit or refund instruction and purchase-price adjustment. If a figure or route is unknown, leave it unresolved; do not enter zero or assume a refund will arrive in time for closing.

Fit consent into the purchase agreement's clock

Work backward from the date when the buyer must decide whether its lease-related condition has been satisfied, not only from completion. Allow time to receive the complete lease file, submit the application, answer questions, negotiate conditions and execute the required documents. These are transaction-specific dates, not a statutory landlord response timetable.

A hypothetical purchase might have a lease condition deadline on October 5 and completion on October 9. If the landlord's October 2 email says consent is subject to an unsigned guarantee and confirmation of a new deposit, that email is not evidence that every requirement has been completed. Record who must settle each issue and what the purchase agreement permits if the condition deadline arrives first. An extension requires the necessary agreement; it should not be assumed from ongoing discussions.

Keep the effective date equally clear. Consent may be signed before the assignment takes effect, and an assignment may require delivery of money, insurance evidence or other documents before effectiveness. Receipt of an application, silence, an encouraging phone call and a draft consent are different events. Keep proof of delivery and the final executed versions together.

Assignment does not answer the seller's release question

The incoming tenant's assumption of obligations does not, on its own, establish that the outgoing tenant or an existing guarantor is released. Section 9.4 of the February 5, 2016 Aquinox Vancouver lease expressly keeps the tenant bound despite a transfer. That actual contract illustrates why release needs its own reading; it is not a conclusion about another lease's enforceability or every guarantor's position. Aquinox Vancouver lease, section 9.4.

Ask which obligations remain with the seller, which pass to the buyer, and which party is released by which document. Address existing defaults and amounts owed rather than expecting a new tenant's signature to erase them. If release is part of the agreed bargain, identify the released person, covered obligations and effective date in the actual documents. An indemnity between buyer and seller is not the same thing as a release granted by the landlord. See personal guarantees in commercial leases for the separate questions about scope, caps and continuing exposure.

Check what the buyer will be allowed to operate

Landlord consent deals with the lease relationship. It is not proof that a proposed business activity has every municipal, licensing, insurance or other approval it requires. Confirm the actual address, premises and operation, particularly when the buyer plans different services or alterations. The seller's past operation does not establish permission for every proposed change.

Also reconcile the equipment list with the lease. A purchase agreement cannot safely treat every fixture as the seller's removable asset without checking ownership, landlord rights and restoration obligations. Identify any unresolved work, notices, insurance requirements and access arrangements before the buyer starts operating.

The result should be a short list of actual decisions: accept the consent package as documented, negotiate specified changes, obtain an agreed extension, or use the rights available under the purchase agreement. A well-organized application helps the landlord evaluate the buyer. A well-organized closing record establishes what was agreed, paid and made effective—and what was not.

By Justin Qiao, Personal Real Estate Corporation, Justin Qiao Group | RE/MAX Crest Realty.

General information checked September 8, 2026. Transaction-specific facts and subsequent rule changes can change the result.