Terminating a commercial lease is not something to be done on a whim. That’s because your commercial lease probably is a legally binding contract between the landlord and your business. If you fail to abide by the provisions of the lease, the landlord could sue for damages. However, there might be ways to amicably end the landlord-tenant relationship. It might help to understand more about your commercial lease.
Common Provisions in a Commercial Lease
Your commercial lease sets out the terms negotiated by the landlord and your business. Leases typically state:
- the date the lease becomes effective,
- how much your company will pay in rent, and
- what you are allowed to do on the premises.
Other provisions that may appear in your commercial lease include:
- Methods for calculating rent increases,
- A description of the premises,
- Details about access to common areas,
- Insurance requirements, and
- How to handle disputes.
Sometimes language related to terminating a commercial lease will also be included.
Reasons for Terminating a Commercial Lease
It may not be easy, but sometimes ending your contractual relationship is the best (or only) way to go. You may find you need to leave your current space for any number of reasons, including:
- Your company needs to expand.
- You now need less space because of downsizing.
- The location turned out to be unsuitable.
- Your landlord is failing to meet its own lease obligations.
It is critical to address problems with your lease immediately. Ignoring the need for terminating a commercial lease will not make the process any easier.
Best Practices
As soon as you know your business will be terminating a commercial lease, review the lease with your attorney. It may be possible to negotiate a favorable exit plan.
- Depending on the terms of your lease, you may be able to arrange a sublease. If that’s not currently an option, consider talking to your landlord about it anyway. Depending on the current market, your landlord may be eager to allow the sublet.
- Another possibility involves buying out your current lease. Negotiating a lump-sum settlement or other arrangement is relatively common.
Of course, your current commercial lease may contain an exit clause. If so, talk to your attorney about triggering the clause.
A Florida Business Lawyer Can Help with Terminating a Commercial Lease
One of the best ways to avoid problems when terminating a commercial lease is to have an attorney represent you as soon as negotiations begin.
Attorney Richard Sierra at the Florida Small Business Center assists clients like you with business and litigation 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.