A business may need to leave its commercial space before the lease ends. Whether it can do so depends largely on the lease terms. An early termination clause may give a business that option, but the clause may include specific conditions, notice rules or costs.
Check the lease before giving notice
Start by looking for an early termination or break clause. The lease should explain when the business may end the agreement and what steps it must take. Check whether the right applies to the business, the landlord or both.
The lease may also require written notice by a certain date. Missing that deadline could affect the right to terminate. Review the notice method and timing before sending anything to the landlord.
Review the costs and conditions
An early termination clause may require the business to pay a fee or meet other conditions before leaving. Review the lease for unpaid rent, other charges, notice requirements and any duties that continue after termination.
The financial consequences of early termination depend on the lease terms and the circumstances of the termination. A business may still have obligations for rent, fees or other amounts depending on what the lease provides.
The lease may also specify the landlord’s remedies and the business’s continuing financial obligations if the business leaves early. Leaving the property does not necessarily resolve every financial issue between the parties.
What if there is no termination clause?
If the lease does not give the business a right to end the agreement early, the business should not simply move out and stop paying rent. The lease may provide other options, such as an assignment or sublease, depending on its terms.
The business should review those options before taking action.
Get legal advice before taking action
Before signing a commercial lease, businesses should review any early termination clause carefully. If a business already needs to leave its space, checking the lease before giving notice or moving out can help avoid unexpected costs and disputes.
An Arizona business attorney can review the lease, explain the available options and help the business understand its obligations before it takes action.