Does a new owner have to pass their own health inspection before the licence transfers?

Generally yes, in most cases where the underlying licence itself doesn't automatically transfer — a change in ownership commonly triggers a fresh review of the premises, since a health authority's approval is typically tied to the current operator's compliance and the physical state of the establishment at the time of application, not to a general, ongoing approval that simply carries forward from a previous owner regardless of any changes.

This means your buyer generally needs their own passing inspection before their licence is issued, which can affect your closing timeline if the inspection reveals issues that need to be addressed first, or if scheduling the inspection itself takes longer than expected. Even a business that has operated without issue under your ownership can face a different outcome under a fresh inspection, particularly if standards or the specific inspector's assessment differ.

Because a failed or delayed inspection can hold up your buyer's ability to legally operate, build time for this into your closing plan and consider addressing any known issues before the buyer's inspection occurs. A Treadstone business lawyer can help structure the closing around this requirement.