How does a sale work when the owner personally owns the building?

This is a common structure among longer-established owner-operators: the building was bought personally years before incorporating the business, or kept out of the corporation deliberately, and a sale suddenly turns one informal relationship into two distinct legal ones.

The seller becomes the buyer’s landlord, or doesn’t

If the seller keeps the building, they need a genuine, arm’s-length lease with the buyer going forward, not the informal arrangement that may have existed while the seller also owned the business. A buyer’s lender will want the same term, renewal, and rent clarity in a newly formal lease that it would expect from any other commercial landlord.

Fair market rent has to replace whatever the old arrangement used to be

Many owner-occupied situations run on below-market or even no rent charged between the personal landlord and their own company, which works fine while both are the same person and stops working the moment a buyer is involved. The operating business’s financials need to be normalized to a fair market rent figure so the buyer is pricing the business on what it will actually cost to occupy the space going forward.

The two transactions can be structured to depend on each other

A buyer typically wants the purchase of the business conditional on getting a lease, or a purchase of the building, on acceptable terms, and a seller usually wants the business deal confirmed before finalizing what happens with the property. Making each transaction a closing condition of the other is standard practice and protects both sides from committing to only half of what they actually agreed to.

This is a structuring question for advisors, not just documentation

How the real estate is held personally versus corporately has real consequences for the seller’s own tax position and for what the buyer can finance. It is worth raising with a lawyer and accountant well before a buyer is at the table, since restructuring how the property is held is generally easier before a sale process starts than in the middle of one.