If you are a tenant in a lease, yes. Notifying your landlord as soon as possible once you have made the decision to sell your business is critical. Your landlord must consent to the purchaser as the new tenant and is entitled to seek information and documentation from the purchaser to satisfy itself that the new tenant will be able to meet the obligations under the lease, for example payment of rent and outgoings. Landlords are permitted reasonable time under the relevant Retail Leases Act (if applicable) to make this determination.
You may even consider seeking the likely required information from the purchaser yourself. This will save time, ensure a smoother process and avoid delay in the completion of the sale of your business.
Case in point: The seller of a Victorian business agreed with a purchaser to sell the business with a 30 day completion date. Contracts were exchanged and only then was the landlord requested to provide consent to the transfer of the lease to the purchaser. The landlord had 28 days to consent or refuse, and ultimately refused consent as it determined that the purchaser did not have sufficient financial resources or industry experience to satisfy the landlord.
What did this mean for the seller? The Contract was at an end and the business was not sold. By that time the seller had made the decision to prematurely notify employees, notify customers and officially and publicly announce the sale, only for it to fail. The seller had made financial commitments that he could not meet and the outcome was extremely devastating.
How could the seller have been correctly advised? The seller should have notified his landlord much earlier and could have sought information from the purchaser at the negotiation stage which would have satisfied the landlord.