Termination Clause In Commercial Lease Agreement
If you want to terminate a commercial lease, the first step is to read your commercial lease. Look for a rescue clause or early termination clause that will allow you to withdraw from the lease if your sales are low. Another clause that can help is a co-location clause that allows you to legally break your lease if an anchor tenant leaves or if the occupancy falls below a preset level. A commercial lease may include a clause allowing the tenant to terminate the lease without being required to pay the remaining balance of the lease. This early termination clause is sometimes referred to as an interruption clause. Certain conditions must be met before the tenant can exercise his rights to terminate the contract before the end of the rental period. The tenant intends to terminate the contract in time. Most break clauses provide that the tenant has the right to terminate the contract prematurely for a certain period of time. For example, a commercial lease may include an interruption clause that allows the tenant to terminate the lease no earlier than one year after the lease begins.
If a tenant and landlord have a good working relationship, a landlord will often understand if a tenant is unable to continue the lease and allows them to terminate the lease prematurely with a reasonable amount of time and without penalty. Entering into an early lease is also a good deal for the lessor, as it is better for him to come up with a mutually advantageous solution than having to pay a lawyer`s fee to obtain a judgment and cash. Plus, they don`t have to worry about you filing for bankruptcy. If your landlord terminates your lease prematurely without your consent, seek advice from a lawyer experienced in contract law. As long as your lease agreement contains a clearly worded termination clause and you meet the conditions surrounding the clause, you can terminate your commercial lease earlier than expected, without financial penalty. As can be seen, commercial leases are often long contracts, which contain many different clauses that determine the responsibilities and obligations of the contracting parties. Therefore, if you are in a situation where you have to prematurely break a commercial lease, it is in your best interest to consult a well-qualified and competent real estate lawyer near you. Here too, penalties for early termination of a commercial lease are often discussed in the contract. It is therefore important to fully understand the risks associated with entering into a long-term commercial lease before signing the contract. Guillaumes LLP are commercial real estate lawyers with experience in helping businesses start-up and terminate commercial leases. If you have problems with real estate or any other commercial dispute, we can help you….Posted on: October 11, 2021, by : greyson