Your commercial property is likely to be your second most significant overhead after staff costs and amount to around 15% of your total overheads. Accessing legal expertise is critical to ensure you do not face costly repercussions if your business circumstances change in the future. AQ Archers, a London-based law firm, can assist you with the termination of your lease agreement, or any other commercial property legal matters. Whether you are a landlord or tenant, understanding your rights when it comes to early termination of a lease agreement is crucial. Much depends on the terms contained within the lease agreement relating to early termination, and whether any contractual breaches have occurred.
Negotiating a deed of surrender
When bringing a commercial lease agreement to an early end, it is preferable to do so in a mutually agreeable way. Typically, this will involve a period of negotiation between the landlord and commercial tenant. As commercial property Solicitors, AQ Archers can handle the negotiation on your behalf and draft a deed of surrender document which protects your best interests. Matters which will require careful consideration include when the tenant will vacate the premises, whether any outstanding commitments have been met, who will pay the legal costs associated with the early termination, and whether an incentive or compensation should be paid.
Forfeiture arising from breach of a commercial lease agreement
In circumstances whereby a tenant has breached the terms of the lease agreement, it may be possible for the landlord to invoke their right to forfeit the agreement. Breaches which give rise to forfeiture may include failure to pay rent, failure to undertake repairs or other work which is the responsibility of the tenant, and sub-letting without permission. Any landlord considering invoking forfeiture should seek legal advice before doing so. A property Solicitor will review the commercial lease to ensure this is possible, and will advise how to go about gaining possession within the law.
If you are a new business or experiencing rapid expansion, you need flexibility in your lease. Break clauses provide this. By negotiating a break clause (or even multiple break clauses), you will be able to quit your tenancy before the fixed term expires without incurring a penalty.
Break clauses can be fixed, rolling (meaning you can exercise your right to break the tenancy any time after a certain date) or linked to a rent review date.
Breaking a lease must be done correctly. Failure to do so could see you risk court action and substantial financial penalties. Our lawyers can assist you with negotiating break clauses in your commercial lease agreement and ensure you exercise your option to break your lease correctly, should you choose to do so.