Early Lease Termination

Commercial Property Early Lease Termination

The early lease termination of a commercial property can be hard on both the landlord and tenant. The landlord might have to be left without income from the property leasing. The tenant might need to move the business elsewhere and even take a break from trading. There are several reasons that can lead to the early termination of a lease. Both parties might be in agreement but nevertheless, it is a difficult and stressful position to be in, heavily impacting on business for both landlord and tenant.

Example Of Premature Exiting

Several reasons might lead to a lease ending early. The Flying Pig is an iconic Cambridge pub where music legends of the Pink Flyod, David Gilmour and Syd Barrett met. Matt and Justine Hatfield leased The Flying Pig for 24 years but were issued with a notice on 7 June 2021, to vacate the premises within 6 months. This commercial property wasn’t just their business, it was also their home. The Hatfields had no intention of ending the lease, but the freeholder had other plans.

Statement From The Hatfields

“We are deeply saddened to have to announce that, despite the public outcry and overwhelming love and support for our gorgeous grassroots music venue and real ale pub, the developer (our landlord) has issued us with 6 months notice to vacate our home and the business premises that is The Flying Pig in October 2021. This cuts our lease short, which would have run to an end in June 2022.”

Break Clause

If the landlord and tenant agree to ending a lease early, without paying any fees, that’s called ‘break clause’. This is a clause in the lease that allows both landlord and tenant to end the lease early. The law says that if a tenant uses the ‘break clause’ to terminate a tenancy early, 2 months notice should be given to the landlord. On the other hand, if the landlord needs the tenant to vacate early, it’s up to the tenant to do it in the time requested by the landlord.

Fixed Term Tenancy

When a tenant leases a property for a fixed term, this is called a ‘fixed term tenancy’. It means that once the date is up, the tenancy ends and the tenant needs to vacate the premises. In this case, it’s up to the landlord to decide if the tenant should stay. If the landlord allows the tenant to stay, 3 months notice should be given to the landlord.

If you are a tenant or landlord looking to terminate a lease early, please contact us for advice. We will look at the lease and provide you with options. SG

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May 17, 2021 at 9:00 am
Category: Commercial Property, Leasing Buying Selling

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