Companies that need a brick-and-mortar facility often lease property instead of buying it. The owners may want to avoid the finality of purchasing property or feel uncertain about their company’s future. It might seem easier to lease than buy, but it’s crucial to remember that a lease is a legally binding document. Is it possible or beneficial to terminate a commercial lease?
Here Are Some Common Reasons People Terminate a Commercial Lease.
Life changes. Business environments and the economy can play a big part in a company’s success. At the time a lease is signed, the landlord-tenant relationship might fit. But after a while, you might need to make some changes. Occasionally, the best move might seem to be terminating the relationship altogether.
For example, some of the common reasons a company might take this step include:
- The business is failing.
- Your company has outgrown your current space.
- The space is now too large for your company, so you need to downsize.
- The landlord is violating the terms of the commercial lease.
- Buildings or locations no longer meet your business needs.
If you feel you need to terminate a commercial lease for any reason, talk to a business lawyer as soon as possible.
You Sometimes Can Get Out of Your Lease …
But there are pitfalls.
Your business lawyer or general counsel could conduct a thorough review of the lease. Such a review could unearth provisions that allow you to leave with little to no drama. However, the opposite could be true – you might be stuck owing the landlord for your early termination.
In fact, your company could become embroiled in a lawsuit or arbitration by trying to terminate a commercial lease. Your business lawyer might be able to minimize the damage or find other ways to terminate the landlord-tenant relationship.
For example, you and your attorney could attempt to negotiate with the landlord. Depending very much on the situation, you might only owe the landlord for a few months. If your landlord is at fault, your company might seek compensation from the landlord for damages.
Talk to an Attorney Before Trying to Terminate a Commercial Lease.
Commercial leases usually contain complex provisions. Solutions to your problems might be available but difficult to see through all the legal terminology.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with commercial leases, and other business matters. As always, Our Goal Is to Help You Succeed™. For an appointment, you may call us at 1-866-842-5202 or use the contact form on our website. We represent clients throughout the State of Florida, including Coral Springs, Coconut Creek, Boca Raton, Delray Beach, Pompano Beach, Sunrise, Fort Lauderdale, Miami, West Palm Beach, Jupiter, Deerfield Beach, Stuart, Port St. Lucie, Orlando, Naples, Fort Myers, Sarasota, Tampa, and surrounding communities.