Signing a lease for commercial real estate can secure the space and location your business requires to be successful. Yet, as time goes on and your business needs change, the terms of an existing real estate lease may not suit your situation. When this happens, you’re left in a difficult position, trying to figure out how to protect your financial interests while still accommodating your business’s requirements. One question that often arises in these circumstances is whether you’re justified in breaking your commercial lease.
A lease is a contract, so breaking it may cost you a significant sum of money. Yet, it may be worth it if any of the following exist in your situation:
- Your business is thriving, and its growth requires a larger or different space.
- Your business is shrinking and the space that you have right now is too big and too costly.
- You’ve found an alternative location that gives your business more exposure in the marketplace.
- Your landlord is making it difficult for you to run your business as you see fit.
You may be in a better position to break your lease if the property you’re currently leasing is in high demand, since your landlord won’t have to expend a lot of resources to re-rent the property. You can also assess whether your lease allows you to sublet the property, which may help you avoid breaching the lease agreement altogether.
If so, be sure to review your commercial lease agreement so that you know the penalties you could face. Then, you should discuss the matter with your attorney so that you know the best way to approach it. Hopefully then you can find a path forward that protects your business interests while shielding your finances as much as possible.