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Oct , 25
How can you break a commercial property lease before time
There are various reasons for which a lease is broken between people. It can either be a rental lease or a commercial lease. There are a lot of ways and procedures involved in breaking a commercial lease and the reasons can be quitting a business, expanding a business, etc. Breaking a commercial lease is an expensive process and one can do it by following the steps discussed below:
Check your lease for early termination clauses:
Plan well and then decide to break your commercial lease. Most commercial leases have a fixed term for breaking them. For any such genuine situation, you can abide by the terms and conditions and break the lease and it will also save you from penalty. Likewise, if you have an invalid reason to break the commercial lease, the owner will reject the proposal of breaking the lease and impose financial penalties as stated in the contract.
Have a prior conversation with the landlord:
It is of utmost importance to notify your landlord about breaking the commercial lease and discuss the facts and procedures needed. You will also get to know your landlord’s idea about the termination of the commercial lease in a receptive manner before signing the lease bond. Always ensure to know your landlord’s nature prior to these important decisions.
Offer a financial incentive to your landlord:
If there is an issue between you and your landlord for breaking the commercial lease, make ways to assure your landlord of getting another tenant before you move out. This will not only provide business to the landlord but will also save you from paying the penalty and might lead to a peaceful settlement between both of you.
Seek help from a lawyer:
Mostly, the landlord does not agree to terminate the commercial lease and negotiate to fix the issue. In such situations, you should seek help from a lawyer. You can also break a lease without a lawyer, but hiring a lawyer will give you maximum protection and the legal know-how will help you and the landlord resolve the case within legal boundaries.
Make sure that you have fulfilled all your obligations:
You must fulfil all the obligations and abide by all the legal terms as mentioned clearly in the bond. Your landlord should actively look for a tenant if the lease is terminated early. The lease term also mentions that a tenant has to pay the rent until a new tenant arrives in the commercial building, even if you are not residing in the same place. If the landlord finds a low paying tenant, your business may be liable for the difference in rent until the expiration of the original lease.
Important tips to remember:
- Make sure to read the document carefully before signing the commercial lease. Treat the terms and conditions as important as they will help you to get out of it easily.
- Check your lease for the subletting rights, as it will let you find a new tenant in your place.
- If you opt for breaking a lease, it is best to find a new tenant to take over the lease, rather than a sublet.
- Breaking a commercial lease may have a negative impact on your credit.
- If you are breaking the commercial lease agreement due to the poor condition of the commercial space, you will have more flexibility when ending your agreement.
- If you are breaking the commercial lease agreement due to factors like health hazards or unsanitary conditions which affect you, your employees or the production, you can always break your commercial lease legally without paying any extra money or forfeiture of funds with the help of a lawyer and the local department of public health.
- All the commercial spaces are subjected to zoning laws and local building codes.
Also, read our article on “10 THINGS TO LOOK AT BEFORE LEASING A COMMERCIAL PROPERTY“
