What to know about breaking a commercial lease

On Behalf of | Oct 4, 2018 | Commercial Real Estate |

Those who start businesses in California do so with the hope that their organizations will grow. One consequence of a growing business may be the need for a larger office, warehouse or retail space. Ideally, business owners who negotiate commercial leases will negotiate clauses that make it easier to get out of them before they expire. It may also be a good idea to ask for a short-term lease if a landlord doesn’t want to negotiate an early out provision.

There is no harm in asking if it is possible to break the lease early even if there is no exit clause. In some cases, the landlord benefits from being able to find a new tenant as it may be possible to charge a higher monthly rent. If the landlord denies the request, the lessee should consider leaving anyway. Generally speaking, whoever owns the property will have to make an effort to rent it again regardless of why a tenant stops paying rent.

As a show of good faith, a commercial tenant can find a new tenant to take over the current lease. This may allow a business owner to leave his or her current space without leaving the landlord with an empty building. Assuming that all parties agree to the deal, it can be beneficial for everyone involved.

If there are disputes or any other problems between companies and their landlords, it may be worth consulting with an attorney. An attorney may be able to review a lease or other agreements to see if any were violated. In some cases, a company and its landlord may be able to negotiate a resolution on their own without the need to go to court. Legal counsel may assist a business owner during these private settlement talks.

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