Business Law

What to Do if You Need to Break a Commercial Lease

If you own a business, chances are that you rent commercial space and are subject to a commercial lease. If you decide to move your business or if you go out of business while in the middle of your lease, then this might be a challenge.

If you are considered a month-to-month tenant, then you will likely have to provide your landlord with the notice required in the lease and generally you should be able to finish out the month and move without having to pay any additional rent. Check your lease.

If you are subject to a lease for a certain period of time and you wish to break the lease in the middle of that term, then your options may be limited.

Long-Term Lease

As part of your commercial lease, there is likely a provision that requires you to make rent payments for the duration of the lease whether you are there or not. So, simply moving out does not get you off the hook for paying rent.

You should understand that your commercial lease is a contract and like all valid contracts, both parties are bound by the specific terms outlined in the contract. Specifically, a landlord agrees to provide you with the commercial space you agreed to rent. If the landlord fails to do so, as set forth in the lease, then he or she has breached the contract.

Similarly, you have agreed to pay rent in order to occupy the commercial space for a set time. If you fail to make a timely rent payment, then you are in breach of the contract.

What Happens if There is a Breach of Contract?

In most states, landlords have a duty to try and “mitigate damages” (i.e., cut their losses by re-renting the space quickly). However, Florida does not follow this general rule. In Florida, landlords have the option to re-ren t the space, stand by and do nothing, or invoke certain rights as may be present in the lease.

If the landlord chooses do nothing and the space is not rented out during the remainder of your lease, then you are responsible for the payments due until the lease expires. If the landlord does re-rent the space, then you may not be responsible for paying rent during the month the space is re-rented.

So, what to do . . .Consult With a Business Attorney

The best thing to do is to try and reach an agreement or compromise with the landlord. The landlord may take a reduced amount of rent rather than take you to court to collect the full amount. But DO speak with your Florida business lawyer before signing or discussing anything.

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