I want to sell my hospitality business and my landlord does not agree to the new tenant. What now?

You rent a commercial space in which you operate a catering business. The lease continues for several years, but you want to sell your catering business. Can a landlord just thwart your sale by refusing the new tenant?

Acquisition of the lease by the potential buyer of your hospitality business requires the cooperation of the landlord. It is primarily up to the landlord whether he agrees or not. Does the landlord not agree to the so-called "substitution"? Then you can ask the court for an authorization to do so pursuant to Article 7:307 of the Civil Code. The judicial authorization will then replace the landlord's consent.

The conditions for the judge's authorization

• There must be a transfer by the tenant of the business established in the leased premises;
• The incumbent tenant must have a compelling interest in that transfer, where a mere financial interest often suffices;
• The successor tenant must provide adequate safeguards for proper performance of the lease and proper business operations;
• If requested by either party, the court must balance the interests of the tenant and landlord.

The catering business does not necessarily have to be yours. In fact, various (other) relationships are conceivable, such as, for example, a franchisee of the tenant actually operating the business being transferred. Nor does your entire business have to be transferred. In fact, it only concerns the business located in the leased property. Nor is it required that the successor tenant continue the exact same business. However, the successor will generally have to remain active in the same line of business.

To avoid litigation and its attendant costs, it is wise to involve the landlord in negotiations at an early stage. This increases the chances of getting the landlord's consent. If the landlord still does not agree to the substitution, you can apply to the court for an authorization for this on the grounds mentioned above. Whether the authorization will eventually be granted is not certain. Therefore, always consider resolutive conditions in the purchase agreement.