Commercial leases
Commercial leases are typically long-term agreements with limited flexibility for tenants who wish to exit early.
A tenant can only terminate their lease before the end of the term under the following conditions:
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The lease includes a break clause that allows the tenant to end the lease early; or
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The landlord agrees to allow the tenant to surrender the lease early.
Tenants should not rely on the second option, as landlords are not obligated to grant early surrender. In most cases, landlords will only permit this if the tenant agrees to pay a substantial surrender premium.
For tenants seeking flexibility to exit a lease early, it’s essential that the lease includes a well-defined break clause. Tenants must also fully understand the requirements for activating this clause. Typically, tenants need to provide notice to the landlord by a specific deadline—usually 3 to 6 months before the break date. The lease will outline how this notice should be given and may include additional conditions that must be met for the break clause to be valid.
Tenants who don’t carefully review the fine print of their break clause risk facing unexpected challenges. If they miss the notice deadline or fail to meet other conditions, the landlord may reject their attempt to terminate the lease.
