What happens to a lease renewal option if the business changes hands mid-term?

It depends entirely on how the renewal option is worded and whether it survives assignment. A renewal option is a contractual right created by the lease, and when the lease is properly assigned to a buyer, the buyer generally steps into the tenant's position and can exercise whatever rights the lease actually gives the tenant — including a renewal option, unless the lease specifically says that right is personal to the original tenant and does not transfer.

Some leases do exactly that: they state the renewal option is available only to the named original tenant, or only while that tenant (or its principals) remains in occupation, which can strip the option away the moment the business is sold. Others allow the option to pass freely with a proper assignment.

Because this clause is easy to overlook until it matters, both buyer and seller should review the renewal provision closely before agreeing on price and terms, since a lost renewal option can significantly affect what the buyer is actually purchasing. A Treadstone business lawyer can confirm whether the option survives assignment in your specific lease.