How can I terminate my commercial or retail lease?
There are several ways that you can break or terminate a commercial lease.
You should speak to a commercial leasing agent and get a feel for the commercial leasing market, being informed on the current leasing market will give an idea on how you may approach your discussions with your current landlord and your leasing agent.
Mutual Consent
One way is by mutual consent, you can approach your landlord and request to surrender your lease and if they are agreeable you may have a deed drawn up that will terminate the lease. You should obtain advice on a surrender of lease as this often can leave you with ongoing liabilities and may not be a full release of your obligations.
Early termination clause
There maybe an early termination clause in your lease and if so, you may be able to utilise the conditions of it to exit the lease.
Assignment of Lease
You may be able to assign the lease to another party, this is effectively transferring your current lease to a new party. You may still have liability under the lease if you choose to assign it to another party and you should seek legal advice to ensure you are aware of any ongoing obligations.
Subletting the Premises
A sublet is usually for part of the premises, however you may be able to assist in bringing in further income to pay the head lease. You should ensure that proper legal documentation is in place for a sublet so that you are covered if any issues arise in the future. A sub-lease may need the approval of the Head Lessor as well.
Appoint an Administrator
If you are insolvent or need to restructure you may be able to appoint an administrator who has the ability to renegotiate leases and other agreements.
Some tenants abandon their premises hoping that the landlord will not pursue them for the default. This is one strategy, but a risky one. Being vigilant and working through the issues can avoid a great deal of stress.