What should you know about commercial lease surrenders?

Sometimes it can be unavoidable to surrender your lease early. Perhaps you own a shop that has not performed as you expected. Surrendering your lease would allow your business to cut its losses. You must, though, have a surrender clause within your lease that sets out the circumstances under which an early surrender would be allowed. Your commercial property solicitor can ensure your lease agreement contains this clause.

Most commercial leases these days have what is called a break clause included in their terms. As its name suggests, the break clause allows your business to terminate its lease before the full term has been reached. Landlords will only allow a break clause to come into effect if all of the terms of the lease surrender are met. These terms often relate to the state of the premises you are leasing, and can also contain a minimum tenancy term before a break clause can be used.

It is important to approach the surrender of your lease correctly, which will mean obtaining the help and advice of a commercial property solicitor with commercial lease experience. If your business has met all of the conditions that relate to the surrender of your lease, your landlord should allow the surrender without any problems. However, if your landlord contests the terms of the surrender, your solicitor will become invaluable as you negotiate with your landlord for a settlement.

The terms of commercial leases can be highly complex. Surrendering a lease must ensure you have a complete break with your landlord. In some cases, business and even individuals have been pursued for rent arrears because the surrendering of a lease wasn’t handled correctly. If you are in any doubt about the basis for surrendering your commercial lease, check this with a qualified commercial property solicitor to ensure you and your business are not pursued at a later date for unpaid rent.

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