The facts on ending commercial leases
A great piece of commercial property situated in the right place can really make your business flourish.
However, what if you’ve outgrown your current premises and need to leave a lease early?
In this instance, there are a few different options available.
Read on as we discuss how to exit a commercial lease without leaving you culpable for ongoing legal repercussions, rent, and advertising fees.
Take a look at this article to learn more about ‘what is a commercial lease’?
What if I want to leave?
It is possible to just leave a lease situation and move into new premises.
But that could result in unfortunate legal consequences.
After signing on the dotted line, you are responsible for:
- All rent for the remainder of the lease term
- The make good clause on the property
- The landlord’s reletting costs
These costs can quickly add up, so you must seek property law advice from esteemed Melbourne property lawyers when thinking about leaving a commercial lease prematurely.
There are several ways you can approach this problem. To find the right solution for you, talk to our Melbourne property lawyers about the specifics of your situation.
The following is general information, but you should always seek professional advice for the best outcome.
Negotiate
Perhaps the simplest solution is to go to your landlord and explain that you seek an early exit from the property.
You could be surprised. Your landlord may appreciate your transparency.
Note that you will usually be expected to foot the bill for the advertising costs to find a new tenant.
It would be prudent to ask Melbourne property lawyers of your choosing to prepare a deed of surrender of lease, which documents your exit agreement.
This deed ensures that you are no longer legally liable for any costs associated with the property after moving out.
If your negotiation skills are a little rusty, you can always get property law advice to understand your rights and obligations.
Are you wondering who pays the costs of a commercial lease dispute?
Assign the lease
Another option is to assign the lease to someone else.
Assignment equates to transferring the lease to another person who takes your place as the tenant.
Most commercial leases will have assignment clauses in them.
Make sure you read through your lease thoroughly before initiating any proposed assignment.
You can also get property law advice and ask Melbourne property lawyers to look at your commercial lease before making a decision.
A landlord would need to have a very good reason to be successful in preventing an assignment.
As long as they are satisfied that the new person you are assigning the lease to will be able to carry out their lease obligations, they will usually agree to the assignment.
Sublet
Subletting presents another way of exiting a lease.
However, you are still liable for the rent.
In this instance, you sublet to another person who pays you rent and outgoings, which you then deliver to the landlord.
You are still legally bound to the obligations of your lease for things such as:
- damage to the property
- make good clauses
- and any failure of the subtenant to pay rent
If you are keen on subletting, you need to check your commercial lease to see if it is allowed.
Your landlord will also require you to seek permission from them before subletting.
If you’re not sure of your legal responsibilities when subletting, why not talk to one of our Melbourne property lawyers at P&B Law?
Are you clear on what your legal obligations are as a tenant in a commercial lease?
What if my landlord has breached the lease?
If my landlord has breached the commercial lease I have signed with them, does that mean I can leave the premises?
This is a common question, and the answer lies in the terms of your lease.
If you have read your lease and you are still unsure of the terms, contact us for property law advice you can count on.
Some examples of ways landlords can breach leases include not maintaining the property or disrupting your quiet enjoyment of it.
Rights to leave a lease are not always stipulated in the lease itself, so in that case, you should contact Melbourne property lawyers for guidance.
Do you know how to resolve a commercial lease dispute?
Need help with commercial leases?
Our experienced Melbourne property lawyers are here to help you get the most out of your lease.
You will be ahead of the game by contacting us for property law advice.
You will be clear on your responsibilities to your landlord and their obligations to you.
Get in touch with us today for Melbourne’s best property law advice.