Signing a commercial lease is a significant commitment for any business. However, circumstances may change, and you might find yourself needing to exit the lease earlier than planned. Breaking a lease improperly can result in severe financial and legal consequences. Here’s a step-by-step guide on how to get out of a commercial lease responsibly and legally.
1. Review Your Lease Agreement
The first step in exiting a commercial lease is understanding your rights and obligations. Your lease contract will outline:
- Lease term and end date
- Early termination clauses (if applicable)
- Penalties or fees for breaking the lease
- Subletting and assignment clauses
- Notice period requirements
2. Check for an Early Termination Clause
Some commercial leases include an early termination clause that allows tenants to exit under specific conditions, such as paying a penalty or providing a set amount of notice. If your lease has this clause, follow the outlined steps to avoid legal complications.
3. Negotiate with Your Landlord
If your lease does not include an early termination option, try negotiating with your landlord. Many landlords prefer to reach an agreement rather than dealing with an uncooperative tenant. Consider offering:
- A lump sum settlement
- A replacement tenant
- Partial rent payments until a new tenant is found
4. Consider Subleasing or Assigning the Lease
Most commercial leases include clauses about subleasing or assigning the lease to another business. Here’s the difference:
Subleasing: You remain responsible for the lease while another tenant occupies the space and pays rent.
- Lease Assignment: You transfer the lease to another business, and they take full responsibility for payments and obligations.
- If your lease permits subleasing or assignment, work with your landlord to find a suitable replacement tenant.
5. Look for Legal Loopholes
You may have grounds to exit the lease without penalties if:
The landlord has violated the lease terms (e.g., failure to maintain the property)
- The space is uninhabitable due to structural or environmental issues
- The lease was signed under misrepresentation or fraud
- Consult a commercial lawyer if you believe you have a legal reason to terminate the lease.
6. Offer a Lease Buyout
If your landlord is unwilling to negotiate, you can propose a lease buyout. This involves offering a one-time payment to terminate the lease early. The amount will depend on factors such as remaining rent, demand for the property, and landlord flexibility.
7. Seek Legal Advice
Breaking a lease improperly can lead to lawsuits, financial penalties, or damage to your business reputation. A commercial lawyer can help you:
- Understand your legal obligations
- Negotiate with your landlord
- Explore alternative solutions
Property Lease Lawyer 
Leave a comment