Seder & Chandler, LLP
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Is it possible to terminate a commercial lease early?

In a previous blog post, we discussed some of the specific clauses that business owners would be wise to ensure are included in a commercial lease. Above all, commercial lease should include provisions that serve to preserve and protect a business owner's interests. In cases where a business owner subsequently wants to terminate a commercial lease, he or she would be wise to closely review the terms of the lease to determine the best course of action.

A business owner's reasons for terminating a commercial lease early will largely determine the approach he or she takes when attempting to negotiate with a property owner. For example, in cases where a business is doing well and has simply outgrown a commercial space, subleasing the space to another business may be an option. Some commercial leases specifically address subleasing requirements. Even in cases where a lease doesn't include specific language related to subleasing, if an acceptable offer is presented, a business owner may be able to negotiate a deal with the property owner.

In cases where business isn't going well and an owner wants to terminate a lease because he or she needs to reduce costs, it's wise to closely review the terms of a lease to determine if a landlord has breached any of the terms contained therein. Lease violations that may warrant the termination of a lease include failures to maintain or repair and a landlord's failure to abide by a competition clause.

Regardless of the circumstances, any early termination of a lease may require the assistance of a legal professional who handles commercial real estate matters. An attorney can review the terms of a lease, work to negotiate a favorable settlement with a property owner and, if necessary, take legal action to dispute the matter in court.

Source: All Business, "Getting Out Of a Commercial Real Estate Lease," March 16, 2016

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