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Learn how to get out of a commercial lease early

As a commercial tenant, there may come a time when you need to terminate a lease. You did not sign the lease with the idea that this would happen, but you never know what the future will bring.

There are many reasons for breaking a commercial lease. Maybe your business is struggling and you need to close it down. Or maybe you are doing so well that it is time to move into a bigger space to accommodate new employees.

The best way to get out of a lease is to plan for this in advance. Before you ever sign on the dotted line, make sure you understand the terms and conditions of the contract. There needs to be language associated with what will happen if an early exit is necessary. For example, you could have a provision that allows you to cancel your lease if you fail to reach particular income projections.

If you neglected to plan for this up front, you are not out of options. For example, you may want to negotiate a buy out with the landlord. Or maybe you can sublet the property to another tenant.

No two commercial leases are the same. For this reason, the way that one person gets out of a lease early may not be the same as another. You should consider this possibility up front, as it will allow you to add language to the contract that favors you in the event of an early termination. If you did not do this, it is time to consider your other options, with one eye toward those that won't have a huge financial impact.

Source: Entrepreneur, "Getting Out of a Commercial Lease," accessed July 30, 2015

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