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 mail@​JBGass.​com