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When can a business break a commercial lease?

When you launch a business, you know that running a business comes with certain risks. You could face an unexpected downturn in sales and may need to get out of a long-term commercial lease you’ve signed. Or you experience a lot of problems with your landlord and want to get out of your lease agreement. Or you realize you need to move to a more convenient location for your customers.

You may consider breaking your commercial lease, but you are wary. How can you do that and minimize potential financial penalties for breaking your commercial lease?

Steps to consider before ending a lease

Here are some steps to follow if you are considering breaking your commercial lease:

    1. Review your commercial lease contract. You need to understand what your financial obligations may be if you end your lease agreement early and if you will be able to get your security deposit back.
    2. See if your commercial lease allows you to end your contract if your business can no longer pay rent or if your contract has a force majeure clause, allowing you to end your contract if an unforeseen event occurs and impacts your ability to maintain the lease.
    3. Ask your landlord if you can sublet your office space to another business. You may get your landlord to agree to this if the building is in a popular area, where finding a business to sublet from you won’t be difficult.
    4. Consult your real estate attorney to help you negotiate ending your commercial lease with your landlord. If your landlord hasn’t been especially helpful in resolving maintenance issues or upgrading the interior of your office space as promised, you may need your attorney’s help to see if this violates your lease or if you can use these issues to help your negotiations to break your commercial lease early.

Sometimes, it may be worth it to break your commercial lease early and end up in a space that better suits your business. Sometimes, you may be able to negotiate to end your commercial lease early with minimal financial impact. With an attorney’s help, you may get a more favorable outcome when you need to exit a commercial lease agreement early.