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Guide on how to break a commercial lease

Guidelines for people staying in a leased house and procedures to break a commercial lease

There are various instances in which a lease is broken between people. The lease breaking can be either a rental one or a commercial one. There are various procedures involved while breaking commercial lease and the reasons can be either quitting the business, expanding the business and so on. Although breaking a commercial lease is an expensive process, one can do it by following the below steps;

Scrutinise your lease for the early termination clauses:

It is very important that you decide of breaking your commercial lease in a planned manner. Most of the commercial leases have a specific term for breaking them. In case of any genuine circumstances, you can abide the terms and conditions and break the lease. Doing this will save you from penalty. Similarly if you have an invalid reason to break the commercial lease, the owner will reject your proposal of breaking the lease and impose financial penalties as mentioned in the contract.

A prior conversation with the landlord:

It is very important that you have an informal chat with your landlord about breaking the commercial lease and get to know the facts and the procedures formerly. Get to know your landlord’s ideology about the commercial lease termination in a receptive manner before signing the lease bond. It is always better to know your landlords nature towards such aspects on a prior basis.

Offer a financial incentive to your landlord:

If there is a tiff between you and your landlord regarding the breaking of commercial lease, you can always assure your landlord of getting another tenant before you move out. Doing this will provide business to the landlord as well as save you from paying penalties. This might lead to a peaceful settlement as well.

Seek a lawyers help:

In most cases, the landlord does not agree to terminate the commercial lease and negotiate an end, in such situations you should approach a lawyer. Otherwise you can also break a lease without a lawyer, perhaps hiring a lawyer will give you maximum protection and the legal representation will ensure that both you and your landlord stay within the legal boundaries.

Ensure that you have fulfilled all your obligations:

It is very important that a person has to fulfil all the obligations and abide by all the legal terms as mentioned in the bond. If the lease is terminated early, your landlord should actively seek a tenant. The lease term also states that a tenant has to pay the rent till a new tenant arrives in the commercial building even though you are no longer residing in that place. Also if the landlord finds a lower paying tenant, your business can be liable for the difference in rent until the original lease expiration.

Important points to be considered:

  • It is always important that you read the entire document carefully before signing the commercial lease. Consider the exit terms important, as they will help you get out in an easy way.
  • Check your lease for the subletting rights, as having them will let you find a new tenant to take your place.
  • In case if you opt for breaking a lease, it is advisable to find a new tenant to take over the lease, rather than a sublet.

  • Breaking a commercial lease can have a negative impact on your credit.
  • If you break the commercial lease agreement due to the increasingly poor condition of the commercial space, you will have more plasticity when ending your agreement.
  • If you break the commercial lease agreement due to factors like health hazards or unsanitary conditions which directly affect you, your employees or production, you can legally break your commercial lease without extra payment of forfeiture of funds by seeking the help of an attorney and the local department of public health.
  • All of the commercial spaces are subjected to local building codes and zoning laws.
Tags : commercial space house lease lease for house lease house lease of property property lease renting house what is leasing

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