Updated on December 28, 2023
Key Takeaways –
There may be many reasons for a business to want to get out of a long-term commercial lease in California. These reasons may include reduction in staffing, employees transitioning to remote work, or a need to move to an alternative location. No matter what the reason is for wanting to get out of the lease, there are many factors you will need to consider in determining the costs associated with getting out of the lease early and if it is a viable option for your business.
Preliminarily, in assessing your ability to get out of a long-term commercial lease, you will need to assess the terms and conditions of the lease agreement between your business and the landlord. The lease may contain specific provisions relating to early termination and your ability to do the same including possibles fines and fees for leaving prior to the expiration of the lease term. There are many factors that may be involved, you will need to consider how long is left in the lease term, and how much financial exposure you may have if you decide to break the lease.
There are options that may allow you to get out of the commercial lease and these options will be determined by the facts of your particular case. For instance, if your lease contains a provision that allows for subleasing, you may be able to find a subtenant to take over your space in the commercial property. However, even if your lease allows you to sublease your rental space, the sublease provision may have specific requirements and may require landlord approval. Moreover, the landlord will typically not let you out of a lease responsibility while the subtenant is in place so that the landlord is covered in the event that the new subtenant fails to pay rent.
Alternatively, you may be able to negotiate with the landlord to end the lease. Especially if the landlord believes that they can easily lease out the space, they may be willing to negotiate a fee in exchange for allowing early termination of the lease.
Finally, it is important to assess whether the landlord has breached any terms and conditions of the lease. If the landlord has breached the lease in a material way, there may be grounds for terminating the lease agreement early. You will want to document the specific actions of the landlord that you believe breach the lease agreement and discuss them with your lawyer. At Schorr Law, our real estate attorneys often analyze commercial leases to scrutinize them for exit point or possible landlord defaults.
If you are thinking about whether you can get out a long-term commercial lease early and need a lawyer to review the facts and circumstances of your particular case including the terms of your lease, you should contact an attorney as soon as possible.
The real estate attorneys at Schorr Law APC are well versed in the nuances of commercial leases and can assist with helping you find a favorable solution for your business.
Contact us today for a consultation by calling 310-954-1877. You can also text us at (310) 706-2265, or send us a message here.