How do I get out of my business lease agreement?
24 August 2022
Taylor Bracewell
One of the flexibilities of having a lease in that you can negotiate at the outset to have a break clause incorporated into the lease and that does allow you to bring the lease to an end on giving a notice period to the landlord. You normally have to give notice in writing and the break clause is often at a set date in the lease so you do need to make a mental note in your diary to review the lease at that time to make sure you don’t miss your break clause.
The other way of getting out of business lease is to transfer the lease to a third party but that will need landlords consent and the other thing to be aware of is that when you transfer the lease to a third party your landlord will often require you as the outgoing tenant to give it what is called an authorised guarantee agreement often known as an AGA for the incoming tenant which means that you will remain liable under the lease for the rent even though you brought it to an end.
In summary, you need to consider whether or not you want the occupation to be for a short term or a longer term proposition, you need to think about certain benefits of release such as the flexibility of having a break clause in there and also security of tenure that’s the right to renew. But obviously one downside to a lease which you need to think about is the fact that you have got to obtain landlords consent to carry out alterations or to transfer the lease. It depends upon the circumstances of where the business is at the time whether or not it’s better to take a lease or to think about a more long-term option of purchasing a property outright.
Here is a video recorded by Head of Commercial Property, Alison Turner:
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