When can a commercial lease be terminated early?

If you rent or rent out commercial space, you should have in place a comprehensive and enforceable lease agreement. These agreements can provide critical direction and protection to both landlords and tenants, should a dispute ever arise. One such dispute could be early termination of a lease.

Lease agreements can be terminated before they expire for a number of reasons. If you are party to these contracts, it is important that you understand when a lease can (and cannot) be terminated lawfully.

A lease can be terminated early if:

  • The tenant fails to pay rent
  • The landlord fails to uphold contractual obligations to maintain the property
  • The tenant is using the space for unauthorized purposes
  • The tenant fails to comply with rules set in the lease agreement
  • Both parties agree to early termination
  • A natural disaster renders the property uninhabitable or significantly destroyed

Early termination of a lease can be unlawful, though, which is important for both tenants and landlords to understand. Examples of unlawful reasons for breaking a lease (or refusing to renew a lease) include:

  • Discrimination against a tenant
  • Retaliation against a tenant
  • Without reason and without warning
  • Refusal to pay rent

Considering all that can be on the line with commercial properties and agreements, it will be vital for parties renting or leasing out commercial space to discuss any decision regarding these leases with an attorney before acting or agreeing to anything. Doing so can help you avoid getting locked in an unfair contract or facing financial and legal penalties for violating the terms of a legal agreement.