Say you’ve taken on a long commercial lease but for one reason or another you want to get out of it – maybe you’re downsizing, or better still have outgrown your current space or perhaps want to buy your own business property. What are your options? Our commercial property lawyers suggest you first consider one of the four alternative options;
1. Assigning the lease – you may find under your current lease that you’re able to go for an assignment – i.e. effectively you sell on the lease to new tenants. Bear in mind that in doing so, any permitted assignment almost always needs the consent of the current landlord. Depending of course on your lease, the landlord may be allowed to exist on conditions on any assignment – possibly including requiring you, as outgoing tenants, to act as a guarantor for the new tenant.
2. Deed of surrender – you might be able to negotiate with your current landlord a termination of your lease
3. Subletting – again, depending of course on the terms of your current lease, you may find yourself permitted to sublet the whole premises – or at least part of them. Bear in mind that any subletting may need the consent of your current landlord. This may not get you out of the lease entirely – but hopefully the rental income from subletting will cover part, if not all, of your current rental obligations.
4. Exercising a break clause – the easiest thing of course, if your current lease contained such a course, is to terminate the lease. It’s amazing, however, how many commercial property leases don’t contain a break clause – even in very long leases. Even the best businesses can’t foretell the future – so it’s always best to push as hard as you can to insert break clauses into your commercial lease – another good reason to make sure that when you do enter into any lease, you check the lease out first with a specialist commercial property lawyer.
If you are experiencing problems getting out of your current lease, or you’re thinking of entering into a new lease and want to make sure that you are not putting yourself at unreasonable risk, get in touch with our commercial property solicitors – who will be more than happy to give you FREE initial legal advice over the phone.
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Problems with commercial property? Looking for quality legal advice? The property law team here at Bonallack & Bishop have vast experience.
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