After you have leased a commercial property for a period of time, you may find that premises that you rent no are longer suitable for your business. Whether this is because you need a larger space due to the growth of your business or because your business has not quite been as successful as you had forecast, if the space is no longer appropriate then you may need to terminate your Lease. In order to terminate your Lease before the end of the contractual term, you will need to take a number of steps to avoid serious financial penalty and this is where the advice of a reliable Commercial Property Solicitor is vital.

Understand what you are committing to

Before you complete your commercial Lease, you must ensure that it is drafted to meet the requirements of both you and your business. Preparing for an ‘early exit’ may seem negative when you are starting out on your commercial venture, but it could ultimately save you a lot of money.

Many Landlords will permit you to terminate your Lease, if your business has progressed as planned, after a period of your occupation, via the inclusion of a break clause in the Lease. However, as a new business, it is wise not to immediately commit to a long Lease with a break clause but rather to a shorter term that allows you the flexibility to relocate if necessary.

Terminating your Lease

Should your Lease not contain a break clause, it may still be possible for you to terminate your Lease. If the rental market is in a healthy state, your Landlord may be able to quickly rent your premises out for an increased annual rent and as such, they should be content with you terminating your Lease. Alternatively, offering your Landlord either a new Tenant to occupy your premises or a ‘release fee’ may facilitate the early termination of your Lease.

Problems terminating your commercial Lease

Although many Landlords are amenable, you must remember that if your Lease does not contain a break clause, then early termination is effectively a breach of contract and you will be liable for the financial penalties accordingly. Additionally, you must ensure that you have not breached any other terms of your Lease when negotiating an early termination.

The number of legalities involved in commercial Leases mean that it is essential to seek the advice of a Commercial Property Solicitor to avoid potentially heavy financial penalties.  

To see how we can help to safeguard your business or to discuss commerical property, please get in touch with Luke Hewitt on 01625 523988 or