Ending A Commercial Lease

Commercial leases are a complex area of the law, and terminating a commercial lease can be complicated. That is why whether you are a landlord or a tenant wishing to end a commercial lease, you need to seek legal advice you can trust. Otherwise you may encounter a number of difficulties along the way.

 

What Does It Say In The Lease?

If you have a fixed-term tenancy, the lease will specify the date upon which the tenancy will end. However, even with a date of expiry stipulated in the lease, it will still be necessary for either the landlord or tenant to actively end the contract. If no action is taken, it will be assumed the tenant wishes to stay on. In this event, the tenancy agreement may be automatically renewed, and the tenant will be liable to pay rent for another year.

 

Forward Planning.

Ending a commercial lease does, therefore, require some forward planning. To be safe, someone wishing to withdraw from a business lease should start considering their options six months in advance of date of expiry. This is particularly important for tenants, who are required to serve a written notice declaring their intentions to vacate the business premises. There are certain time limits and restrictions within which this notice must be served, and thus it is always prudent to seek legal help. Otherwise the time frame may lapse, meaning you miss your opportunity to remove yourself from the agreement.

 

Other Things To Consider.

Furthermore, when a commercial lease is coming to an end, a tenant will need to give careful consideration to the terms set out in the contract. For example, a landlord will normally assert that the property must be returned in good condition at the end of the tenancy. Thus a tenant will need to prepare themselves financially for any repairs and maintenance, which are often laid out in a schedule of dilapidations.

 

Ending a Commercial Lease Early.

Alternatively, circumstances may arise meaning that either the landlord or the tenant wishes to terminate the lease before the date of expiry. There a number of ways in which this can be done, although the options available will differ depending upon whether you are a landlord or a tenant.

 

A landlord will be able to terminate a lease and take back their business premises if:-

  • The tenant has broken the terms of the lease (such as failing to pay rent on time) and there is a forfeiture clause in place;
  • Break clauses are included within the lease.

On the other hand, a tenant will be able to terminate a lease if:-

  • The landlord accepts a surrender of the lease;
  • The landlord agrees the assignment of the lease;
  • Break clauses are included within the lease.

 

Source: Artipot.com

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