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Precautions to take when breaking a commercial lease

On Behalf of | Jan 1, 2021 | Commercial Real Estate |

There are certain circumstances in which it may be necessary for a commercial tenant to vacate a storefront, building or property before the lease is up. Breaking a commercial lease can sometimes come with unexpected fines and complications, but it may be a necessary step for a California business. There are precautions and steps that may make it easier to avoid some potential fines and complications.

A commercial lease should outline what will happen if the tenant breaks the lease early. In most cases, penalties include steep fines. Before taking on this expense, a business will want to carefully review the circumstances to determine if breaking the lease is really in the best interests of the company. This may be necessary if the business is closing, the rent is too high or the company has an immediate need for more space. After making this decision, it is then necessary to look over the contract once again.

It is possible the contract allows for early termination of the lease in certain circumstances. If not, however, a tenant may be able to simplify the situation by speaking with the landlord. Negotiations or discussions could lead to terms that are agreeable to both parties, and this could result in lower fees and fines for the tenant.

If considering breaking a commercial lease, a tenant will want to speak with an experienced attorney first. A review of the situation will reveal what options are available and how a California business can protect its long-term interests. An assessment of the individual situation can provide clarity and direction in a complex situation.