Preparation is key

1. Get ready for market

Before putting your lease on the market, check it for any obligations or constraints it places upon you in order to assign it. Some have non-assignment periods, often two years from the date you took on the lease. Some will require you to notify the landlord of your intention to assign the lease, even well before you have agreed a sale or assignment with a buyer.

Ensure your business is ready for marketing - compile an inventory of trade fixtures and fittings, get your last year's accounts prepared and put together management reports showing sales and overheads for each month since your last year end or keep copies of your VAT returns as they are prepared. Compile an up-to-date staff list - and make sure you have a copy of your lease to hand as your buyer, his solicitor, finance broker or bank manager, valuer and your solicitor will all require a copy.

Take advice from a recognised agent early to avoid unnecessary delays by going to the market half cocked and/or ahead of time.

2. Length of lease

You can still assign your lease if you have a year or two left to run but it is subject to conditions. If your lease is within the 1954 Landlord & Tenants Act there are usually only two reasons why your landlord can refuse to grant a new lease upon expiration of the existing one: if the landlord wishes to occupy the premises himself or wishes to re-develop the site.

If the lease is outside the 1954 Act, you will need to obtain confirmation from your landlord as to his view on the terms of a new lease and you should seek professional advice. A buyer will require comfort as to the security of his tenure of the premises if he is to pay you a decent premium for it.

3. Property dilapidation

When you took over your leasehold premises there would almost certainly have been a schedule of condition report produced by the landlord's surveyor. This details the property's state of repair at the point you became responsible for it. You will be required to ensure the property is in at least the same state of repair when the lease is to be assigned; to ensure this, the landlord will instruct his surveyor to revisit the property and produce a report itemising any works required. You will be responsible for the cost of these works - it will be covered in the repairing obligations clause within your lease.

It is advisable to have this report produced early on, to ensure there are no costly nasty surprises. When the extent of the damage - financial as well as physical - is known, you will need to agree with your landlord as to when the works are completed. If it is beyond your purse, often a deal can be struck with the incoming tenant to carry out the work usually in return for a reduction in the premium. This would be subject to your landlord's approval.

4. Sale agreed - job done?

Not by a long chalk. Agreeing a sale is frequently the easy part and it is here the real work starts. At all times remember that although you have agreed your sale with a buyer, there are three parties involved in a leasehold transaction. Your landlord will need to be satisfied your buyer is suitable and reliable as a prospective lessee. If he is not satisfied, you will not be allowed to assign your lease.

Almost all leases have a "not to be unreasonably withheld" provision in respect of the landlord's consent for assignment, but at the very minimum he will require trade or personal references, a bank reference, and sight of a business plan proving your buyer at least plans to be able to pay his rent, and will also probably wish to meet him. Your agent should take responsibility for collating all of this, together with obtaining confirmation of your buyer's finance arrangement. If your landlord is a pub company, and your lease is tied, it will also need to be satisfied that your buyer will operate the pub within the terms of its trading agreement and is suitable for the size and style of your particular unit within its tied estate.

5. The lawyers

You, your buyer and the landlord will each instruct your own solicitor. Your solicitor will prepare a draft contract and send it with a copy of the lease to your buyer's solicitor. He will also contact the landlord's solicitor to put him on notice that an assignment is required and a "licence to assign" document will need to be produced. This document will need to be approved by your buyer's solicitor also.

The references and business plan will be forwarded by your agent either to the landlord, or to their agent if they use one to deal with assignments. The interview needs to be arranged, at or before which, your buyer will probably need to produce a copy of his personal licence. Your buyer's solicitor will raise enquiries against the contract, obtain the searches and liaise with your buyer's mortgagees/brokers if he is not a cash buyer.

6. Exchange and completion

It is only at the point of exchange of contracts that you, your buyers and your landlords are legally bound to complete the assignment. Therefore, the sooner you are in this position, the sooner the chances of the sale falling through are substantially reduced or eliminated. This is why it is important to be properly prepared before you market your leasehold business.

There can be a delay between exchange and completion in order to have property repairs completed, if this has been agreed between all parties at the negotiation phase. If this is the case, your contract will probably need to be conditional upon this. Completion is the date you receive your money and hand over your keys. The stock-take will also be carried out on completion day, the cost of which is usually split 50:50 between buyer and seller.