Lease Assignment – I need to get out of a business lease. I have a flower shop which I lease from my landlord. The lease I originally signed was a standard law society lease for 5 years. I have been there for 2 years and now the business has grown so I need to expand and therefore have secured larger premises. What is the norm here? I appreciate that I have signed for 5 years but I have been a good tenant (I have installed full central heating etc) paid rent on time etc, etc. I am prepared to give my landlord 2-3 months notice to re-let the property so I was just wondering what happens normally.
The usual practise in this situation is to assign your lease.
What you have got to appreciate with a commercial lease is that for the term of the lease you are for all intents and purposes the “owner” of the property, pretty much the same as if you were paying a mortgage to the bank, except you are paying rent to a landlord.
With these “ownership” rights go all the other obligations, which mean you are responsible to pay the rent to the end of your term, and meet all the other covenants, come what may.
Break clauses, if you have one, cannot always be relied on to get you out – see:
Speak nicely to your landlord – he might just let you off the hook, especially if he had other opportunities to hand, but usually this would be unlikely.
Try to negotiate a cash settlement – buy your way out. This is one option I have given my tenants in the past and they have sometimes been happy to do this on a mutually agreed compensation or lease surrender fee.
The best option for the tenant though is to contact the local agents and put the property on the market – to let. You may even be able to get a premium for the lease if you are lucky?
The landlord is obliged to agree to an assignment without undue delay and providing the new tenant meets similar criteria to the original in terms of credit checks / references etc and appropriate use. Indeed, it’s in a landlord’s interest to assist.
You will of course be obliged to pay all letting and legal costs, both yours and the landlords for a deed of assignment.