Consequences of Breaking a Commercial Lease
Our expert commercial lease team can help both commercial landlords and tenants bring leases to an end early. We can advise on how to end a commercial lease or whether the terms of a lease have been broken.
In the current climate, many businesses are going through difficult times and will want to evaluate their position under existing leases. However, in the absence of an express right in the commercial lease agreement, tenants cannot withhold rents without running the risk of putting themselves into arrears.
Our commercial property team can provide specialist advice to both landlords and tenants who require advice and assistance regarding a potential lease termination.
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Contact us today for more information about commercial leases and how we can help. Simply call us on 0161 929 0121 or complete our online enquiry form and a member of the team will give you a call back as soon as possible.
A commercial lease is a contract with the landlord for the use of the property. It may contain few protections for the tenant. Protections must be written into the lease from the outset stipulating what penalties apply if the lease is terminated early.
You should never enter into a legally binding contract unless you can fulfill its terms including the length of the tenancy. Usually, you can only end the tenancy early if your landlord agrees or unless you are exercising a break clause or negotiating a surrender with the landlord.
You will remain responsible for paying the rent until the end of the tenancy contract or the next break clause point. However, if your landlord agrees to re-market the property before this, then once a new tenant is found your liability for the rental payments will be reduced pro-rata. You may well be asked to cover any of the landlord’s financial loss as a result of ending the tenancy early.
Before making any decisions you should contact our commercial lease team.
Tenants – Ending a Lease
As a tenant, you can also end your lease early if:
- the landlord agrees
- you pass the lease on to someone else (if allowed)
- you are allowed to sublet (you will still remain responsible for the rent, even if you are not trading from the premises)
If these circumstances do not apply, then you must continue to pay rent for the full term of the tenancy.
Landlords – Ending a Lease
As a landlord, you can only end a lease when the tenant fails to pay rent or meet other lease obligations.
If you have incorporated a ‘forfeiture clause’ in the lease, you can use it in these situations to end the lease. However, if the tenant can challenge this in court they may well be allowed to stay in the property.
Evicting a commercial tenant comes with its own difficulties and you should seek legal advice before you do anything.
- Ending a commercial lease via negotiation
- Ending a commercial lease with a notice
- Preparing a deed of surrender to end a commercial lease
Landlords or tenants seeking to end a commercial lease early should take immediate advice from a specialist commercial property solicitor to find out the best way to proceed. This is a complex area of law, and many lease terms and clauses will be open to interpretation.
If you believe that you may have breached a lease or want to know if a breach has occurred, you should call our team today.
How to Contact our Commercial Property Solicitors
We are well known across the country and can assist wherever you are based. We also have offices based in Cheshire and London.