Sooner or later, all businesses face an expiring commercial lease, but a majority of business owners don’t know exactly what happens when a commercial lease ends and what they should do about it.
The location of a business plays a key role in its success and development. Ignoring an expiring lease can put your tenancy at risk. Whether you want to renegotiate your contract, terminate it, or are planning to extend the lease, try not to delay it to the last moment and take the necessary steps as soon as you can.
Here’s what you can do when your commercial lease expires.
Make a Swift Decision
Before the lease ends, you need to think about the pros and cons of renewing or terminating the contract. Ending the contract may sound easier because it only requires you to return the property to its owner as the contract’s end date arrives. But since you need to return the property to its owner in its original condition you may have to get it repaired and remove all your equipment.
However, if you decide to continue the agreement you’ll have to inform the landlord about your intentions and schedule negotiations. It’s best if you send a formal document to notify them about your plans to maintain an official record of all your dealings. A real estate lawyer or a commercial lawyer can help you maintain transparency throughout your dealings and may also help you avoid legal complications.
Identify Any Secured or Unsecured Tenancy
Once you inform the property owner about your objectives, closely examine the original documents and check if you hold a secured or unsecured lease.
If the lease isn’t secured, you may have a limited say in the negotiations. The property owner may also deny your request or simply refuse to renew the contract as they aren’t legally obliged to consider your negotiations.
If, however, you hold a secured lease, the property owner will have to provide you with an authentic reason if they refuse your renewal request. Therefore, we highly recommend businesses have a secured contract. Having a secured contract ensures a seamless and easy renewal process.
Establish New Terms and Conditions
Once you send your request for the continuation of the commercial lease, the renegotiation process begins. Make sure you create a detailed new contract so that you’re legally covered on all ends in terms of your dealings with the property owner.
Review the contract with attention to detail and ask the other party to make some favorable modifications to the contract. It’s best if your property owner agrees on inserting an out-clause in the legal contract.
Before the negotiation starts, list out your business goals and identify the terms and conditions that may benefit your business in the longer run. A commercial lawyer can help you negotiate effectively.
At Nanda & Associate Lawyers we have a team of highly qualified litigation lawyers, personal injury lawyers, real estate litigation lawyers, and commercial lawyers who can provide you with legal help during these processes.
If you need help, contact us today.
Disclaimer: This article is only intended for educational purposes and shouldn’t be used as a substitute for legal advice.