If a business owner’s property requirements change whilst they are renting commercial premises, it can be a difficult situation to resolve. Experts from Lopian Wagner say that those in a position like this need to understand what their options are, so that they can identify the least expensive method of getting out of the lease. It’s crucial to seek legal
advice at this stage, so as to determine the best court of action, comply with any legal regulations, and negotiate the right deal.
Some commercial leases, Lopian Wagner says, will include a break clause, which gives the tenant the right to terminate their lease on a specified date. If this date is approaching, and the tenant is considering moving to a new premises, this is the best time to do so, as it leaves them with no further liability for their current premises. Even with a break clause, it is important to for the tenant to check the lease carefully, and make sure that they follow the required procedures; if they do not, they may lose their right to break the lease.
Another option for the tenant is to negotiate to surrender the lease with the landlord. Lopian Wagner says that many landlords are open to this, but may charge a payment for it. Tenants interested in this option should bear in mind that their negotiating position will be stronger, if they make it easy for the landlord to find a new tenant who is willing to pay what they have been paying for the premises.
Sometimes, tenants who rent commercial properties are legally entitled to end their lease,
if it is found that their landlord has not complied with the terms of the agreement; for instance, by not fulfilling their obligation to maintain the property. However, Lopian Wagner says that in practice, it’s usually easier to use this as a bargaining tool during negotiations for lease surrenders, instead of taking the landlord to court. Lastly, depending on the terms of the commercial lease, experts from Lopian Wagner say that the tenant may have the right to assign the lease – this, broadly speaking, is the process by which the tenant sells the lease onto someone else.