Can a municipality refuse to transfer a business licence over unpaid fines from before the sale?

Yes, this is a realistic risk, and it's a good example of why licence status needs to be checked carefully before closing rather than assumed to be in good standing. Municipal licensing bodies often have discretion to refuse a new licence, or a transfer or change-of-ownership application, where there are outstanding fines, unpaid fees, or unresolved compliance issues tied to the business or the premises — and this can hold up your buyer's ability to operate even where the underlying fine has nothing to do with your buyer personally.

Whether the fine attaches to the business, the property, or you personally as the prior licensee can affect exactly how this plays out, and municipal practice varies depending on the specific licensing regime involved. In some cases, resolving the fine directly clears the way; in others, the municipality may still want to see a clean compliance history before approving a new application.

Because unresolved fines can stall closing at the worst possible moment, check for and resolve any outstanding municipal issues well before you finalize a sale. A Treadstone business lawyer can help identify what needs to be cleared up in advance.