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Advantages to an Early Commercial Lease Termination

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If you need to terminate your commercial lease early due to business reasons, or if you simply think that it would be a better idea to modify or end your agreement, you may wish to find a lawyer and keep the following information in mind.

When You Are Allowed to Terminate Your Commercial Lease Early

First of all, unless certain clauses and provisions are included in the commercial lease, you cannot easily terminate it before its time is up. These clauses may include:

  • Assignment clause - This clause allows you to transfer your lease to another party before it expires. The other party must agree to all the terms of the lease, and generally speaking, the landlord should agree to the reassignment as well. However, a lawyer may enable you to transfer without express permission if an assignment clause is in the original lease agreement.
  • Break clause - The break clause is a common clause that allows either a commercial client or a landlord to terminate the lease under certain conditions. Common conditions for commercial lease terminationinclude at or after a fixed date, with the payment of a certain penalty, or if there is a particular beneficiary involved in the break. A lawyer can help you go over your lease to determine the break conditions.

Additionally, one party may be able to terminate your lease early if the other significantly violates the lease agreement terms. A lawyer can help you determine if this may be the case.

Finally, both parties may agree to modify the length or terms of the lease at any time.

Benefits of Early Lease Termination

If you terminate your lease early, you will:

  • not have to pay rent on the commercial space
  • not be responsible for the upkeep, maintenance or utilities on the space
  • be freed from any additional legal duties to and relationships with your former landlord

In certain circumstances, this can be quite advantageous for your business or commercial endeavors. If you can no longer afford your commercial space or if you need to move elsewhere, early commercial lease termination could be the best option for you.

Concerns if You Plan to End Your Commercial Lease Early

While there are significant advantages to an early commercial lease termination, there are also significant risks. Unless you take all the proper legal precautions, you may be forced to meet the obligations of your lease, even if your business fails or the space is vacated. Furthermore, if you are found to be in breach of contract, you may be liable for significant damages, including but not limited to the entire obligation of the lease to be paid in full immediately, punitive damages and attorney's fees.

Connect With a Real Estate Attorney If You Plan to Terminate Your Commercial Lease Early

Laws related to commercial real estate vary according to your state and jurisdiction as well as the terms of your particular lease. If you want definitive answers about commercial lease termination, you should consult with a professional real estate attorney. An attorney can provide legal guidance and useful assistance in all matters related to your agreement and its potential termination.

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 03-16-2018 12:25 AM PDT

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