Commercial Lease – Break Clause

break clauseHow do you break clause in a commercial lease agreement?  If you need to end a commercial lease early, a commercial property solicitor can view the clause in the agreement which makes provisions in the event of early termination of a tenancy.

Once tenancy has begun, the business may suffer a downturn.  The area may be affected by social or economic issues, or the business may prove to be unfeasible.  The lease may be fixed for a term but your property solicitor may be able to identify aspects of the term clause that allow for an early termination of the tenancy.

The landlord may have given prior consent in certain circumstance, for the tenant to released from the tenancy contract earlier than the term stipulated.  Tenants should ensure that commercial leases make provisions for eventualities beyond their control.  A tenant could be liable even if the premises have been vacated.  Tenants have the legal obligation to pay rent and other business expenses, including maintenance and insurance premiums, during the lease term.  Unless the landlord has agreed to an early termination of the tenancy, the tenant will have a legal obligation to pay rent.

Whatever reason leads to the early termination of a tenancy, the landlord needs to be notified.  A property solicitor will look at the lease and determine how to break clause and negotiate with the landlord.  If the lease has a rolling break, then the tenant should be allowed to end the lease term at any time.

Before exercising a break clause, you need to consult with a property solicitor in order to comply with the requirements set out by the landlord.  The landlord is entitled to collect rent until a new tenant leases the property. So if you are contemplating breaking a lease, consider doing so with minimal or no penalties.  Check the Breach of Contract clause, or Early Termination clause.  Your landlord may actually be sympathetic and make allowances but you will be wise to seek legal advice and allow your property solicitor to liaise and negotiate with the landlord on your behalf.  SG


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