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How to Break a Business Lease


Knowing how to break a business lease may come in handy for several reasons.  Your current circumstances may change and you may find your business upsizing or downsizing, you may need to move to a new location, or you may encounter an unexpected hike in rent.

Here is a checklist of seven ways you might legally break it.

1. Renegotiate With Your Landlord

If possible leave your landlord with goodwill by renegotiating your lease, asking for a termination of your tenancy, finding a tenant to replace you, or placing an ad for a replacement business on behalf of the landlord.

2. Get Everything In Writing

If your renegotiation with the landlord does work, get the new agreement in writing. This paperwork can save you from unpleasant surprises later on. Use an attorney to write a clear description of the agreement, complete with the landlord’s signature.

3. Sublet to a New Tenant

Although your name will still appear in the contract, it might be possible to get somebody else to take over the building in exchange for a reduced rental or some other benefit for assuming tenancy on your behalf.

4. Pay What You Owe On Your Promise

Since your landlords are in business, too, they may consider allowing you to break the lease by paying for the remaining period.

5. Pay the Penalty

Since your signed contract is binding, you may wish to pay the penalty, whether it is foregoing your security deposit, paying the amount owed for the remaining period, or paying a penalty for early termination. Besides the binding contract, you also have to consider your reputation. You don’t want it to follow you to your next location, ruining your business.

6. Obtain Legal Advice

An attorney can help you review your lease and provide the best legal advice on how to break it.

7. Take away a Lesson

Sometimes you may have to break a lease because of certain bad decisions–whatever the reason, benefit from it and factor it into your new business start up.

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