Special Considerations When Terminating a Commercial Lease


When financial or business interests change, commercial landlords and tenants may find that terminating a lease is necessary. However, terminating a lease can give rise to a host of legal claims unless it is authorized under the agreement. Both landlords and tenants should carefully review their leases to ensure that their termination actions conform to the specific conditions covered in the lease. It is always best to carefully draft the provisions dealing with termination in a written lease so that the parties are well informed of their rights.

Landlord’s Early Termination Rights

Typically, commercial leases contain early termination provisions which provide specific conditions under which a landlord may cancel a lease. This includes the commercial tenant’s failure to pay rent or violation of other lease provisions. These clauses often require written notice of the termination or provide for a cure of the violation within a set time period. The lease may set forth instructions for delivering notice of termination as well. Some leases also allow landlords to unilaterally terminate and pay the tenant a specified amount under conditions not pertaining to a breach. For example, the contract may provide for a lease termination if the building is undergoing renovations.

Wrongful Termination by the Landlord

A landlord may be liable for unlawful termination if he terminates the lease in the absence of the conditions described above. In addition to wrongful termination, the landlord can be subject to claims for wrongful eviction and conversion of the tenant’s property if he erroneously evicts the tenant, fails to conform to lawful eviction procedures, or removes the tenant with the tenant’s property remaining on the premises.

Early Termination by a Tenant

In general, a tenant may not terminate the lease without express permission granted in the lease or without another legal justification. If a tenant terminates early in the absence of these circumstances, he may be liable for breach and wrongful termination. These claims can carry significant monetary penalties including rent acceleration, which means that the tenant would be liable for all rent payments through the conclusion of the lease. The tenant should be aware of the consequences of early termination, and if warranted, negotiate with the landlord to include an early termination option under specific conditions. For example, a break clause in the lease allows the tenant to terminate early without liability for the remaining rent.

The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. can help you litigate your real estate claims. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at https://www.markweinsteinlaw.com to find out how they can advise you.

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