Can a landlord require a new security deposit when a lease is assigned?

A new security deposit is one of the more easily overlooked line items in a business purchase, largely because it is rarely quoted until the landlord has actually reviewed the buyer’s financials, well after the purchase price itself has been agreed.

Why the existing deposit doesn’t just carry over

The deposit on file reflects the seller’s credit standing at the time the original lease was signed, sometimes many years earlier. A landlord evaluating an incoming buyer is assessing that specific legal tenant, not the operating history of the business the buyer is acquiring, however well established that business is.

What form the extra security can take

Landlords may ask for a cash top-up, a standby letter of credit from the buyer’s bank, a fresh personal guarantee in place of or alongside cash, or some combination of the three. A letter of credit in particular ties up part of the buyer’s own credit facility, which is worth factoring into how much borrowing capacity is left for working capital.

This is a negotiable closing condition, not a fixed demand

A buyer with strong personal financials, an established operating track record elsewhere, or a straightforward guarantee can sometimes negotiate the size down, or push for a cap tied to a set number of months’ rent rather than an open-ended figure left to the landlord’s discretion. Raising it during the same conversation as the assignment consent, rather than after the landlord has already settled on a number, is where that leverage exists.

Budget for it before you finalize an offer

Because the amount is not standard and is seldom disclosed early, treat it as a variable closing cost alongside legal fees and adjustments, and ask the landlord directly rather than assuming the deposit figure written in the existing lease is what will actually be required.