How to Break a Store Rental Lease

People find the need to terminate store-rental leases for many reasons: bad location, insolvency, or an undesirable landlord, to name a few. This article provides a general overview on how to break a store rental lease (commercial lease). It is important to keep in mind that state laws differ concerning commercial lease agreements, so you should consult a local attorney before undertaking an early termination.

Things You'll Need

• Copy of your most recent lease agreement along with any amendments or addenda
• Canceled rent checks, if available

Instructions

Breaking a Commercial Lease

1. Determine necessity. You may have already decided that you want to terminate your lease. It is important that you weigh the pros and cons of an early termination including what it may cost you not just in any early termination fees, but also relocation costs, and possible marks against your personal and/or business credit. Ultimately, it might be better for you to wait out your current lease rather than suffer financial consequences.

2. Review your lease. This is something that you might want to do with an attorney. Many commercial lease agreements will contain early termination and/or liquidated damages provisions. Landlords are well aware that tenants sometimes must terminate early, and therefore have these protections built into their lease agreements. If your lease has either of these provisions, they will determine what economic detriment you will suffer for early termination. This could include forfeiture of your security deposit, or an early cancellation fee.

   If your lease does not have early termination language, then proceed to the next step.

3. Talk to your landlord. Oftentimes landlord-tenant issues can be resolved simply through dialogue. Explain your situation and/or your desire to terminate early. If the lease is silent on the matter, the landlord will likely work with you to resolve the early termination. You may have to pay an extra month's rent, pay an administrative fee, or otherwise, but in the end the landlord may let you out of the lease. The alternative to the landlord would be pursuing a costly and time-consuming eviction or repossession action which, depending on your state, could be a major ordeal that nobody would want to go through.

   If your landlord won't work with you, or if the landlord is the problem, then proceed to the next step.

4. Plan an exit strategy. If the lease is silent on early termination, and the landlord won't work with you, you should plan an "exit strategy" to determine your best way out of the rented property. This may simply be a matter of packing up and moving out and not paying any more rent, in which case the landlord would keep your security deposit and repossess the property afterward. This is commonly called "abandonment" and can subject you to monetary fines. Also, depending on the state in which the lease is based, and the terms of the lease agreement, the landlord may be entitled to collect the balance of the rent from you. If you are planning on utilizing this step, it is absolutely vital that you speak to a local attorney who is well versed in landlord-tenant law to best determine what liability you may have, if any, based on the laws of your state.

   Most people do not like to litigate--it is expensive and time-consuming--and landlords are no different. However, if you are dealing with a large property management company that can afford the costs of extended litigation, the costs of early termination could far outweigh the benefits. Obviously if you are insolvent, litigation would not get them very far, but then you might need to consider a company and/or personal bankruptcy filing in order to effectively break the lease without further issue.

Tips & Warnings

• You can find the names of local landlord-tenant attorneys through your local or state bar associations.

• This article is for informational purposes only and should not be construed as legal advice.