Most businesses will find themselves in a position of having to get out of a lease at some point. It is crucial that you familiarise yourself with your options before taking action as there is always the risk of breaking the law.
1. What are my options when getting out of a lease?
Your options depend entirely on the lease terms. You may be able to terminate the lease if it has a break clause (a section of the tenancy agreement which provides you with specified dates that allow you the automatic right to abolish your lease). Sometimes, you may be able to negotiate your lease termination with your landlord. Another option may be to assign (sell) the lease to a new tenant.
2. Which is the best option getting out of a lease agreement for me?
Terminating the lease is the most ethical option and provides the smoothest exit. The process of assigning the lease to another tenant can be more costly and time-consuming, as you will be required to find a new tenant and negotiate with both parties. Subletting can also be a way out of a lease, but the original lease will remain in force and you will retain your liabilities.
3. Is it possible to negotiate the lease termination even without a break clause?
Your lease termination and any other changes to the terms of the lease can be negotiated at any time.
4. How much will it cost to terminate the lease?
When it comes to the lease termination, payments can normally be negotiated but market conditions may have an effect. For example, if the local property market is weak, the size of your payment may be substantial, and vice versa. Sometimes you might be liable to pay for repairs and redecorations, if your agreement requires you to return the premises to their original conditions.
5. What will happen if I simply walk away from the property?
If you decide to just leave, you will still be held liable under the terms of your lease. In this case, the landlord has the right to take legal action against you to recover the money you owe and any legal costs.