How to Terminate a Commercial Lease
Send a letter to your landlord., Arrange a private meeting., Discuss terminating your lease., Put any agreement in writing.
Step-by-Step Guide
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Step 1: Send a letter to your landlord.
If you need to end your lease early and want to negotiate early termination with your landlord, send him or her a letter requesting a meeting to discuss the issue.Read your lease carefully before you contact your landlord, and make sure there isn't already an early-termination clause you should follow.
If your lease does contain an early-termination clause, but your situation doesn't meet the conditions of that clause, include that information in your letter so your landlord understands why you need to negotiate outside of the lease.
Your letter should be collegial, but professional.
Approach your landlord as a fellow businessperson, and explain that you would like to negotiate an early termination of the lease agreement.
Depending on how long you've leased the property and your relationship to the landlord, you may want to attach a copy of your lease for reference. -
Step 2: Arrange a private meeting.
Try to meet with your landlord in a neutral location that has a minimum of distractions so the two of you can talk without interruption.A neutral location means that neither you or your landlord have the upper hand as a result of your surroundings.
Make sure you have all the information and documentation you need in advance of the meeting so you're prepared for questions your landlord may have.
You may want to write an outline or checklist of issues you want to discuss to keep your negotiations on track and make sure you don't inadvertently leave out something important to you.
If you have a tense relationship with your landlord, or have had problems or disagreements in the past, you may want to suggest using a neutral third party as a mediator to facilitate your negotiations. , Explain to your landlord the reasons you need to get out of the lease early, and listen to his or her concerns.Propose terms that come closest to satisfying most, if not all, of the issues presented by you and your landlord.
You and your landlord have a lot of flexibility to negotiate an agreement that best meets your needs.
For example, you might offer to give up some or all of your security deposit in exchange for the ability to terminate your lease early.
Keep in mind that your landlord also is a businessperson, and his or her primary concern is not losing money on the property.
Reaching an agreement with you will benefit your landlord in that he or she won't have to worry about chasing you down for the money or having a property sitting vacant for an extended period of time.
If you have another tenant in mind who is willing to take over your lease, you may be able to negotiate an assignment of the lease with your landlord so the new tenant can take over from you and fulfill your obligations under the lease in your stead. , You and your landlord can always terminate a lease by agreeing to do so, but your agreement typically must be in writing to have any legal effect.If you have a written lease, its terms can only be changed with another written contract signed by both parties.
However, even if you don't have a written lease, writing out the terms you've negotiated for terminating the lease protects you and keeps your landlord from later changing the agreement or arguing the terms were different than you thought.
Both you and your landlord should read over the termination agreement carefully before signing it.
Make sure you the terms make sense and reflect your understanding of the agreement.
Keep in mind that your lease agreement will be void on the date specified for the termination to take effect, so make sure any obligations related to the end of the lease also are included in your termination contract.
Once you're both happy with the written contract, print up two copies and sign and date each of them.
That way you and your landlord each have an original copy of the agreement. -
Step 3: Discuss terminating your lease.
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Step 4: Put any agreement in writing.
Detailed Guide
If you need to end your lease early and want to negotiate early termination with your landlord, send him or her a letter requesting a meeting to discuss the issue.Read your lease carefully before you contact your landlord, and make sure there isn't already an early-termination clause you should follow.
If your lease does contain an early-termination clause, but your situation doesn't meet the conditions of that clause, include that information in your letter so your landlord understands why you need to negotiate outside of the lease.
Your letter should be collegial, but professional.
Approach your landlord as a fellow businessperson, and explain that you would like to negotiate an early termination of the lease agreement.
Depending on how long you've leased the property and your relationship to the landlord, you may want to attach a copy of your lease for reference.
Try to meet with your landlord in a neutral location that has a minimum of distractions so the two of you can talk without interruption.A neutral location means that neither you or your landlord have the upper hand as a result of your surroundings.
Make sure you have all the information and documentation you need in advance of the meeting so you're prepared for questions your landlord may have.
You may want to write an outline or checklist of issues you want to discuss to keep your negotiations on track and make sure you don't inadvertently leave out something important to you.
If you have a tense relationship with your landlord, or have had problems or disagreements in the past, you may want to suggest using a neutral third party as a mediator to facilitate your negotiations. , Explain to your landlord the reasons you need to get out of the lease early, and listen to his or her concerns.Propose terms that come closest to satisfying most, if not all, of the issues presented by you and your landlord.
You and your landlord have a lot of flexibility to negotiate an agreement that best meets your needs.
For example, you might offer to give up some or all of your security deposit in exchange for the ability to terminate your lease early.
Keep in mind that your landlord also is a businessperson, and his or her primary concern is not losing money on the property.
Reaching an agreement with you will benefit your landlord in that he or she won't have to worry about chasing you down for the money or having a property sitting vacant for an extended period of time.
If you have another tenant in mind who is willing to take over your lease, you may be able to negotiate an assignment of the lease with your landlord so the new tenant can take over from you and fulfill your obligations under the lease in your stead. , You and your landlord can always terminate a lease by agreeing to do so, but your agreement typically must be in writing to have any legal effect.If you have a written lease, its terms can only be changed with another written contract signed by both parties.
However, even if you don't have a written lease, writing out the terms you've negotiated for terminating the lease protects you and keeps your landlord from later changing the agreement or arguing the terms were different than you thought.
Both you and your landlord should read over the termination agreement carefully before signing it.
Make sure you the terms make sense and reflect your understanding of the agreement.
Keep in mind that your lease agreement will be void on the date specified for the termination to take effect, so make sure any obligations related to the end of the lease also are included in your termination contract.
Once you're both happy with the written contract, print up two copies and sign and date each of them.
That way you and your landlord each have an original copy of the agreement.
About the Author
Marie West
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