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At times, there are many good reasons to terminate a commercial lease in Manhattan. One common factor is when a business is working through a rapid growth stage and a relocation is essential for growth. This situation requires an evaluation that determines whether you can lawfully break an existing commercial lease.
Preparation is critical before signing any commercial lease. Make sure that you negotiate a reasonable opportunity to exit the lease in case of having to leave the existing property in order for the business to succeed. It may not help to hear that now in this situation, but it is always good to know you have that bargaining power in future endeavors.
An exit stipulation should be customized to your needs and a reflection of where you see your company in the future. This part can get a little tricky, so it would be a good idea to speak with a real estate attorney for commercial leases in Manhattan.
Further, you can always propose a much shorter lease term if you anticipate your business quickly outgrowing the location.
When you are currently holding a commercial lease, bite the bullet and respectfully ask the property manager if you can break it. Depending upon the industry, the owner might agree to your proposal and decide to bring in a new tenant. Again, the feasibility of this happening depends on many things include location, demand, and general timing.
There are always alternative solutions, and negotiation is always on the table for discussion. For instance, the commercial landlord might be open to a buy-out where you work out the payment for the rest of your tenancy.
A commercial real estate attorney can use specific tactics to amend a commercial lease. The first step is to have him or her review the existing one to uncover opportunities to amend. If the relationship with your landlord is good and demand is high, the lease can also be re-written for an earlier exit preemptively.
Another solution is to offer finding a replacement tenant at your expense. While the owner is not obligated to take the proposed replacement, it demonstrates good faith.
Finally, you might have to break the lease and leave early. Sure, your property owner can sue you for the unpaid future rents, but some commercial leases hold a duty to mitigate damages. This means that your landlord must actively look for a replacement tenant immediately and not try to stick you with lost rent claims.
Walking away should always be the last option and originate from absolute necessity. Just remember that you have options when breaking a commercial lease.
These situations can be arduous and complicated. Always consult with a real estate attorney for commercial leases in Manhattan, like Aronstam Law. We can help you read through your documents and develop the right clauses and stipulations that keep your business healthy and in the right space.