How To Legally Exit A Commercial Lease

There are a number of reasons you may want to end a commercial lease early. For example, you may have outgrown your premises, or perhaps you need a different type of premises. Maybe your business has shrunk, and you can no longer afford the extra space. No matter the reason, sometimes you are able to end a commercial lease earlier than the agreed date. 

We recommend finding a solicitor for legal advice if you are considering ending your lease early, as this article will not be able to cover all aspects of every lease.

The Break Clause

Although not in every lease agreement, a break clause is an agreement that allows both the tenant and landlord to end a lease early without facing a penalty. The break clause will include an agreed date when the lease can be ended and will state how much notice you must give the other party in order to use the break clause. There may also be other conditions, for example paying the rent by an agreed date.

Without A Break Clause

If a break clause is not an option, then your landlord may agree that you can either end the lease early or pass the lease on to someone else.

Surrendering The Lease

This is where the landlord has agreed to end the lease early. You will need legal documents which prove that you and your landlord agreed to end the lease.

Assignment Of The Lease

This is where the landlord has agreed to pass the lease on to someone else. There will be details of whether this is possible or not within your lease, and you will require the landlord’s permission. They may ask you to provide a guarantee for the new leaseholder.


This is where you let out all or parts of the leased premises to other businesses, who pay you rent. Although your lease will not end, you are able to reduce its cost or make a profit by letting others use the premises. Whether this is possible depends on the details of the lease and will require the landlord’s permission. You are still responsible for paying rent to the landlord, whether trading from the premises or not, this still applies even if you have not been paid rent by the letters.

Landlords Without A Break Clause

As a landlord, it is only possible to end a lease early without a break clause when the tenant fails to pay rent or meet other lease obligations, such as those stated inside of a forfeiture clause.

Giving Notice

A fixed-term tenancy means the lease automatically comes to an end when the term is up. After a fixed-term tenancy has ended, the tenant usually has to give 3 months’ notice, and the landlord 6 months, if they want to end the lease. The lease will state the amount of notice each party must give.

Written by Stephen Taylor Propaganda

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