The commercial space you’re leasing for your business was perfect when you found it. Now it’s not. Maybe your business has expanded, so you need more space. Maybe you’ve got more employees working remotely, so you need less. Perhaps you’ve found that the location just doesn’t bring in the traffic you’d hoped or it’s just not convenient for many of your clients.
However, you still have months or maybe even longer on your lease. How do you break it without paying a steep price?
Re-read your lease
Review the lease carefully – preferably with the help of an experienced attorney. Is the landlord living up to their obligations in the lease? If they’re not, they might be willing to terminate it rather than risk being taken to court.
If that’s not the case, is there an exit clause? If so, what are the terms? Determine whether you can live with those.
Negotiate with your landlord
If there’s no exit clause, do you think your landlord would be agreeable to letting you out of the lease? If real estate values have increased in the area since you moved in and there aren’t any vacancies in the building, they might be able to lease the space to a new business at a higher price. Do a little research and find out if your decision to leave might be advantageous to your landlord before you approach them about ending your lease.
If your landlord doesn’t have a waiting list for your spot, you might be able to negotiate a buy-out. This can work in any number of ways. If you just have a few months left, they might be willing to take half of what you’d pay them if you stayed if they think they can find a new tenant. It might simply involve not getting your security deposit back.
If there’s an option to sublease your space, you might choose to do that if your landlord won’t give you a way out you can afford. However, be careful about subleasing to the wrong person because you’re still going to be responsible for the property for the remainder of your lease.
Before you sign another lease, be sure your attorney reviews it and recommends points for negotiation in the terms. You’d be surprised at how a well-negotiated lease can improve your business.