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If a business isn’t thriving, can you leave a commercial rental?

On Behalf of | Jul 15, 2022 | Business & Commercial Law |

When you started your business, you found a commercial property that you thought would be perfect. And the building itself does work well enough for your needs, but now you’ve been in that building for two years of a five-year lease, and you realize you have a big problem. The company just isn’t making as much money as you thought.

You believe that the reason you are not earning as much is specifically because of your location. The building may work, but the location is wrong, so you’re not getting the traffic levels that you anticipated. You feel like the company isn’t going to succeed unless you can move to a new location, but you’re not through the lease yet. Are you still allowed to leave? 

You have a number of options

You may be able to break the lease, and the first step would be to talk to the landlord to determine where they stand. In some cases, landlords will be willing to work with you.

One way to make them more likely to work with you is to find someone to sublease the space. If you do this, then the landlord knows that they’re still going to get paid through the subleaser, and you can set your business up somewhere else.

Finally, you want to consider if there are any exit clauses in your contract. In fact, some business owners anticipate this scenario and specifically put in a clause saying that they have to hit certain earning projections or they can break the lease without penalty.

The future of your business is very important, so make sure you know what legal steps to take.