What if one landlord objects to the sale of a multi-location business?

Each location has its own lease, so one landlord’s objection touches one site. A sale priced as a package may still depend on it. Begin by reading that lease, then work out what the province’s rules say about consent, and only then decide how to handle the site in the sale agreement. Other provinces have rules of their own.

What Ontario says

Under s.23(1) of the Commercial Tenancies Act, a lease containing a covenant against assigning, underletting or parting with possession without licence or consent is deemed to be subject to a proviso that the consent is not to be unreasonably withheld, unless the lease contains an express provision to the contrary. Under s.23(2), if the landlord refuses or neglects to consent, a judge of the Superior Court of Justice can, on the application of the tenant or the assignee, determine whether consent is unreasonably withheld and, if so, permit the assignment.

What Quebec says

Under articles 1870 and 1871 of the Civil Code of Québec, the lessee gives the lessor notice and must obtain consent, and the lessor may not refuse without a serious reason. A lessor who refuses must tell the lessee the reasons within 15 days after receiving the notice, or is deemed to have consented. Under article 1872, a lessor who consents may not exact any payment other than reimbursement of reasonable expenses. Under article 1873, an assignment discharges the former lessee unless, where it is not a dwelling lease, the parties agree otherwise.

Handling one site in the sale agreement

Ask the landlord for its objection in writing and consider what information about the buyer might resolve it. Then talk to the buyer about the options: a closing condition for that location, a delayed transfer of that site, excluding it from the sale, or a price adjustment. None is automatic, and each affects the rest of the deal. BDC advises sellers to review contracts, leases and business agreements and update them if needed.

See closing the sale of your business for how the closing steps fit together.