How does landlord consent to a lease assignment work in a business purchase?

When an asset purchase includes the premises and the seller’s lease is to be assigned to the buyer, the landlord’s part in that depends on the lease wording and on provincial law. This page explains how the consent step is built. The paperwork list is a different thing, and sits in the landlord consent checklist. When a refusal is lawful is covered in can my landlord refuse to assign my lease.

Start with the assignment clause

Find the clause that restricts assigning, underletting or parting with possession. In Ontario, section 23(1) of the Commercial Tenancies Act treats a clause against assigning without licence or consent as subject to a proviso that consent is not to be unreasonably withheld, unless the lease contains an express provision to the contrary. An express contrary term in the lease changes the starting point, so it is worth finding before anything else.

Québec builds the steps into the Civil Code

Under article 1870 of the Civil Code of Québec, the lessee must give the lessor notice of the intention to assign, with the intended assignee’s name and address, and obtain the lessor’s consent. Article 1871 allows refusal only for a serious reason. Article 1872 says a lessor who consents may not exact any payment other than reimbursement of reasonable expenses resulting from the assignment. If a landlord asks for a fee, ask how it fits that rule.

What a consent covers

Ontario’s section 24 says a licence to do an act that would otherwise create a forfeiture or a right of re-entry extends, unless otherwise expressed, only to the permission actually given. It does not prevent a proceeding for a later breach unless the licence says so. Section 26 adds that an actual waiver in one instance is not assumed to extend to other breaches. So read the consent letter for what it authorizes, and for whether the landlord has said anything about existing defaults.