You have found a business you want to buy, and the seller is asking for a deposit to reserve it. The price seems reasonable, but you have not seen the full premises lease, the inventory is missing, or someone assures you that certain details “can be sorted out later”. This is the moment to clarify the terms: paying money may bring commitments you have not yet considered.
When buying a small business in Barcelona, negotiating before paying helps establish what you are buying, the terms on which you can use the premises, and what happens if an obstacle arises. Sometimes the difference between a manageable purchase and a problem lies in a condition nobody has put in writing.
What does the deposit actually reserve?
Before transferring money, establish who receives it, their authority to do so, and what each party is committing to. Will the seller take the listing down? For how long? Will the amount be deducted from the price? Is the purchase subject to reviewing documents, or are you already accepting fixed terms? If an agency is involved, it should also be clear which amounts are payable to the seller and which represent agency fees.
Calling a payment a “reservation”, “deposit” or “arras” does not, by itself, establish its legal consequences. The agreement and the rules applicable to the transaction must be reviewed. Do not assume you can withdraw by forfeiting only that amount, or that any difficulty will entitle you to a refund.
The premises lease can change the whole transaction
A business may look attractive yet offer limited prospects if the lease has little time left or its terms change. Ask for the complete lease, its annexes and any subsequent amendments. Check the remaining term, rent, rent reviews, guarantees and expenses, as well as clauses governing assignment and use of the premises.
It is necessary to establish whether you will take over the existing lease or negotiate a new one. For commercial premises, the contractual terms are particularly important: neither an automatic requirement for the landlord’s consent nor an unconditional right to assign the lease should be assumed. Where the landlord’s involvement is needed, clarify it before making a payment that commits you.
What the price includes and what still needs checking
The phrase “everything included” leaves too many questions unanswered. The agreement should identify the furniture, equipment and stock included, their condition, and how they will be valued at handover. Ownership also needs checking: a machine may be leased, financed or supplied on loan by a supplier. The trading name, website and other assets offered should likewise be clearly defined.
The documentation authorising the activity needs a separate review. An establishment being open does not, in itself, prove you can operate your intended business there. Check the relevant licence or other authorisation, the activity it covers, and the applicable change-of-holder procedure. If you intend to make changes, further technical or administrative checks may be needed.
If there are employees, the transaction may constitute a transfer of an undertaking, with employment obligations that cannot be removed simply by an agreement between buyer and seller. Potential tax and Social Security liabilities should also be reviewed. These matters require appropriate checks; a clause stating that you are buying “free of debts” does not replace that review.
Payments, deadlines and conditions for not proceeding
You can propose making your commitment subject to specific conditions: receiving certain documents, clarifying the continuation of the lease, or verifying an important aspect of the activity. These conditions must be accepted and precisely drafted. Set out what must happen, who must provide evidence, the deadline, and the consequences if a condition is not met.
It is also necessary to agree when the balance is payable, when the keys and inventory are handed over, and how completion of the agreed steps will be documented. If a refund is agreed for a particular situation, specify who must repay the money and within what period. Writing “subject to checks” without defining them can leave unresolved the very disagreement you wanted to avoid.
An example: the price works, but the lease does not
Hypothetical example. A buyer is negotiating the purchase of a hairdressing business for €65,000. She is asked for a €6,000 deposit, but the lease expires in eighteen months and its continuation has not been agreed. Before paying, she proposes making the transaction conditional on expressly defined lease terms, with a deadline and an agreement about what happens to the deposit if those terms cannot be secured. The seller may accept, suggest changes or reject the proposal; the buyer can assess the response before committing her money.
How our law firm can help
At EXLEGEBCN, a law firm in Barcelona, we review the stage negotiations have reached, the available documents and the conditions that matter to you. Within the agreed scope of our engagement, we can put proposals to the other party or their representatives and prepare the agreement recording the negotiated terms. Where accounting or technical checks are needed, we identify the issues to clarify with the appropriate professionals.
This article concerns transfers of small businesses. If the proposal involves buying shares in a company, the scope of the review changes: the company itself and its liabilities must be examined.
If you have received a reservation agreement or have been asked for a deposit, gather the proposal, premises lease, available documents and messages about outstanding conditions. Tell us the deadline you have been given to decide. With that information, we can assess what should be clarified and negotiated before the next step.