Landlord Consent Checklist for Buyers Purchasing a Business in Ontario

If the business you are buying operates out of leased space, the landlord is not a bystander in your deal — they are a required participant. Most commercial leases say the tenant cannot assign the lease to a new owner without the landlord's consent, and no consent usually means no assignment, no matter how ready the rest of your purchase agreement is.

A landlord consent checklist helps your lawyer request everything needed from the landlord early, instead of discovering gaps the week before closing. This article walks through what buyers typically ask for, why each item matters, and where the law gives you some protection if a landlord drags its feet.

Why Landlord Consent Is a Closing Condition, Not a Formality

Most commercial leases in Ontario include a clause prohibiting assignment or subletting without the landlord's written consent. That clause is enforceable, and closing your purchase without it can leave you occupying space you have no legal right to hold.

Ontario's Commercial Tenancies Act does give tenants — and by extension assignees — a meaningful backstop: where a lease restricts assignment without consent, the Act deems that clause to include an implied condition that consent will not be unreasonably withheld, unless the lease expressly says otherwise. That does not mean consent is automatic. It means an unreasonable refusal can potentially be challenged, but you still need to ask, and the lease's own wording controls first.

Because of this, landlord consent is almost always written into a business purchase agreement as a condition of closing — the deal doesn't complete until it's obtained (or waived).

The Core Checklist

Your lawyer will typically request the following package from the landlord, usually through the seller (who has the existing relationship) with your lawyer coordinating the paperwork.

• [ ] Written consent to assignment — a signed document from the landlord agreeing to the lease moving from the seller to you.
• [ ] A current, complete copy of the lease — including all amendments, extensions, and side letters, so you know exactly what you're inheriting.
• [ ] An estoppel certificate — a landlord-signed statement confirming key facts: the lease is in good standing, rent is current (or stating what's owed), there is no known default, and no side agreements exist beyond the lease itself.
• [ ] Confirmation of the rent roll and any deposits held — what's owed each month, and whether a security deposit or last month's rent is on file and will transfer or be refunded.
• [ ] Any conditions attached to consent — landlords often require the incoming tenant to sign a new indemnity, provide a personal guarantee, meet a financial-strength test, or agree to updated lease terms as the price of consent.
• [ ] Confirmation of permitted use — that your intended use of the space matches what the lease allows, especially important if the buyer plans any change in how the business operates.
• [ ] Landlord's contact for closing coordination — many landlords want a direct line to counsel rather than relying solely on the outgoing tenant.

Why the Estoppel Certificate Matters So Much

An estoppel certificate is the landlord's own written word on the state of the tenancy — separate from anything the seller tells you. If the seller says rent is current and the estoppel says otherwise, you want to know that before closing, not after. It also forecloses a landlord later claiming a default existed that it didn't disclose when asked directly.

Sequencing: When to Start the Landlord Consent Process

Starting this process early matters because landlords are not on your deal's timetable. A landlord's own approval process, or simply a slow response, can hold up an otherwise-ready closing — plan for it explicitly in your closing schedule.

What If the Landlord Refuses or Attaches Difficult Conditions?

A landlord can attach reasonable conditions to consent — a personal guarantee, proof of financial capacity, or updated insurance requirements are common. Outright refusal is different, and the Commercial Tenancies Act's "not unreasonably withheld" language becomes relevant here, subject always to what the specific lease actually says.

If consent is refused or conditions are unworkable, your options generally include:

1. Negotiating directly with the landlord (often the fastest route).
2. Structuring the purchase to preserve the existing tenant entity — for example, through a share sale rather than an asset sale, since a share sale changes who owns the corporation but does not itself require a lease assignment (the same corporate tenant remains the lease-holder).
3. Making the purchase agreement conditional on consent, so you can walk away without penalty if it isn't obtained.

Which of these fits depends heavily on how your deal is structured. A Buying & Selling a Business lawyer can help you weigh a share deal against an asset deal specifically because of issues like this one.

Frequently asked questions