Navigating an early exit from your commercial lease can be simplified by focusing on three main strategies: break clauses, subletting, and lease assignments. Here’s how each can work for you:
Commercial Lease Break Clauses
Understand your options within the lease – a break clause allows you to terminate your commercial lease early under specific conditions. Review your lease to determine if a break clause is included, and understand the terms associated with it.
Meet the Requirements – ensure you comply with any stipulated conditions, such as providing written notice within a specified timeframe or meeting certain criteria (e.g., rent payment up to date).
Communicate Clearly – notify your landlord formally and early, adhering to any requirements outlined in the break clause to ensure a smooth process.
Subletting within your Commercial Lease
Check Lease Permissions – verify whether subletting is permitted in your lease agreement. If allowed, this can be a useful way to transfer financial responsibility without breaking the lease.
Find a Suitable Subtenant – look for a reliable subtenant who can meet the landlord’s approval, ensuring they are capable of fulfilling the lease obligations.
Formalise the Arrangement – work with your landlord to create a formal subletting agreement, outlining responsibilities and ensuring the subtenant adheres to the same terms you agreed upon.
Lease Assignment within your Commercial Lease
Explore Assignment Possibilities – a lease assignment involves transferring your entire lease obligations to another tenant. Review your lease to see if assignments are permissible.
Gain Landlord Approval – assignments typically require landlord approval. Present a qualified candidate who is as reliable as you are or more so.
Complete the Legal Process – formalise the assignment process with legal documentation, ensuring all parties (you, the landlord, and the incoming tenant) agree to the terms.
Naturally, exiting your commercial lease early isn’t always simple and you may need professional help or advice to navigate the process. Our commercial lawyers can talk you through the above, review your existing lease, and advise you of the possibilities to exit your commercial lease early. Please use the form on this page to arrange for a call back or a meeting to discuss your needs further.
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