Commercial leases cover eventualities beyond a tenant’s control. 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 dated in the lease agreement. Regardless of the circumstances, if a tenant fails to pay rent, a landlord may seek compensation. Unless the landlord has agreed to an early termination of the tenancy, the tenant will have a legal obligation to pay rent. A commercial lease can include a clause that allows for early termination of a tenancy.
Whatever the reason that leads to the early termination of a tenancy, the landlord must 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. There are different means by which a tenant can terminate a lease. One way of terminating a lease without liability to pay rent or compensate the landlord is to break notice and surrender by operation of law.
Tenants need to serve notice in an adequate manner. If the landlord has stipulated in the agreement how notice should be served and also how much notice should be given, then the tenant will need to comply. The purpose of a service notice clause is to ensure that the right procedure is followed when a tenant wants to break clause. It is up to the tenant to give the landlord adequate notice and in the method set out in the lease agreement (ie in writing: by letter or email).
If you are a tenant and would like us to review your lease agreement or if you are considering an early termination of your tenancy, please give us a call for an informal discussion. SG
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