In making the decision whether to assign or sublet, the tenant should first carefully examine its lease to determine whether the lease contains any provisions prohibiting or restricting assignment or subleasing.
Commercial leases, like any other contracts, are governed by their terms.
The odds usually aren’t stacked in the tenant’s favour when it comes to breaking a commercial lease.
However, if you used a tenant representation specialist before signing your contract, you should have received the right advice to protect yourself.
Well negotiated leases may have a ‘break clause’, however, most landlords are reluctant to include one of these.
A break clause basically lays out the circumstances and the manner in which a tenant can break a commercial lease early.
However, if the contract contains such provisions, the existing tenant needs to get the landlord’s consent.
This can prove quite costly for the tenant, who may have to continue to pay rent even if they no longer occupy the premises.
As with any contract, it’s up to the two parties to negotiate terms.
One option may be to allow early termination of a lease if a new tenant with similar financial security takes over. However, the new tenant would take over the full liability of the remaining lease.