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Getting out of a Lease
3. Your Lease
Ask your solicitor - or a chartered surveyor - to review your lease agreement and explain your options.
3.1 The existence of break clauses gives you the automatic right to terminate the lease at specified dates.
- For example, a nine-year lease might have break clauses which allow the tenant to terminate the lease after three or six years.You still have a problem if you wish to get out of the lease before the specified date.
3.2 The lease may give you the right to assign the lease or sub-let to another tenant, with or without various restrictions.
- If you do not have these rights in the first place, you may be able to negotiate these rights at a later stage - at a price.
3.3 Some leases are more flexible than others.
- The shorter your lease, the easier it should be to get out of. It may be possible to negotiate a deal with the landlord by paying him some or all of the outstanding rent.
- Over the last ten years, leases have become shorter, more flexible, and generally far more favourable to tenants.
- An occupational lease (or standard or institutional lease) is difficult to get out of.The lease typically runs for 12 to 25 years and has strict legal restrictions - since it can be traded on the property market.
3.4 Take any opportunities that arise to improve the terms of your lease.
- For example, when your lease comes up for review, try to negotiate better terms in return for any increase in rent.
Labels: Premises, Reduce Costs
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