06:52
Faizan
There are a number of reasons that can make you decide to terminate your commercial lease.
One factor is if your business has not been successful as you hoped it to be. When you rent a space and you find that your business is not receiving the customers that you expected, you are left with no otherwise other than to terminate your lease.
Another reason is if you your business has done so well such that the leased premise has become too small for you thus you need to expand in order to keep up with your customers' demands.
Getting out of a business lease is usually challenging; however, it's possible to do it. One of the things that you can do is to create break clauses in the agreement form. For example, if you are leasing a property for five years, you can create a clause that allows you to terminate your lease after three years.
Another way of getting out of a lease is by assigning a lease. Here you pass your lease on to other business. Although, this is a very effective way of getting out of a contract, it's often prohibited in short leases. Some property owners also prohibit it during the last few years of your contract.
If you want to assign a lease, you need to find a tenant who will replace you. To be on the safe side you should consult your landlord who will check the prospective tenant's accounts and references.
Although, the new tenant will be the one who will be fulfilling the terms of the lease, you will still be left with some responsibilities. For example, you need to ensure that the landlord is paid in a timely manner.
Another excellent way of getting out of a lease is by under leasing. Here you sub-let the property that you had already rented and as a result you become the landlord of the incoming tenant.
You need to note that the terms of the sub-lease are similar to those of the head-lease; therefore, you can't give your new tenant rights that extend beyond your own rights as a tenant.
One factor is if your business has not been successful as you hoped it to be. When you rent a space and you find that your business is not receiving the customers that you expected, you are left with no otherwise other than to terminate your lease.
Another reason is if you your business has done so well such that the leased premise has become too small for you thus you need to expand in order to keep up with your customers' demands.
Getting out of a business lease is usually challenging; however, it's possible to do it. One of the things that you can do is to create break clauses in the agreement form. For example, if you are leasing a property for five years, you can create a clause that allows you to terminate your lease after three years.
Another way of getting out of a lease is by assigning a lease. Here you pass your lease on to other business. Although, this is a very effective way of getting out of a contract, it's often prohibited in short leases. Some property owners also prohibit it during the last few years of your contract.
If you want to assign a lease, you need to find a tenant who will replace you. To be on the safe side you should consult your landlord who will check the prospective tenant's accounts and references.
Although, the new tenant will be the one who will be fulfilling the terms of the lease, you will still be left with some responsibilities. For example, you need to ensure that the landlord is paid in a timely manner.
Another excellent way of getting out of a lease is by under leasing. Here you sub-let the property that you had already rented and as a result you become the landlord of the incoming tenant.
You need to note that the terms of the sub-lease are similar to those of the head-lease; therefore, you can't give your new tenant rights that extend beyond your own rights as a tenant.
Posted in: business
