I want to retire and sell my pharmacy, but I have a lease that has about five years left to run. What do I do? 

 

If your company owns the pharmacy, you can either sell the shares in the company (which would then transfer all the assets) or the separate assets. On an asset sale, the buyer chooses which assets to purchase from your business, such as the pharmacy lease, NHS pharmacy contract, goodwill, staff and stock.

With a lease with a short term left to run, a buyer will usually want to negotiate for a new longer lease to be granted direct to them by the landlord (with the existing lease being formally surrendered), but they may take your existing lease to negotiate a new lease going forward.

Your lease will set out any conditions that need to be satisfied for an assignment and this usually includes getting the landlord’s consent. You may also have to provide an authorised guarantee agreement (AGA).

If the buyer does not want your lease you will have to surrender it, but your landlord may demand a payment for this and you will also need to agree if any payments such as loss of rent are due and who will pay the legal costs.

You should review the terms of your lease and then agree with the buyer, as early as possible, if they will buy your business by way of a share or asset purchase – and if you need to surrender it and they take a new longer lease instead (they will need to agree terms with your landlords to do so).

The above is a general overview and we recommend that independent legal advice is sought for your specific concerns.

Jennifer Berritt is a solicitor in the pharmacy property transactions team at Charles Russell Speechlys LLP