There are all kinds of reasons that tenants may seek to terminate their commercial leases early. Sometimes a better location comes along and it’s a once-in-a-lifetime opportunity for the business or the business simply outgrows its current space. Other times, economic problems can force a business to downsize or close.
Whatever the reason, getting out of your lease may not be as difficult as you’ve been led to believe. Here are some things to consider:
Is your initial lease over?
If you’ve been in your location for a while (past its initial terms), your lease may have already transitioned to month-to-month. Check for an automatic renewal provision to see if you’re really committed for more.
Is there an early termination provision?
If you were lucky (or wise enough to negotiate for it), your lease may have an early termination clause. You may be able to end your lease for a fee, although you may also have to repay the landlord for certain improvements or other expenses.
Can you sublease?
Many commercial leases allow a tenant to sublease their space to another business. If you have a long time left on your lease, you may be able to use this provision to ease the financial distress breaking the lease may cause. Just be wary: Your landlord probably retained the right to approve any potential tenants.
Can you negotiate?
Direct negotiation with your commercial landlord may also help. Sometimes a landlord is willing to work with a commercial tenant so that everyone’s financial strain over the situation will be diminished.
Every lease is unique, so read yours over carefully. An experienced attorney can help you better understand what may happen if you break your lease — and what you can legally do to improve your position.