How do I end my lease?

Commercial Property Leases

If the fixed term of your lease is coming to an end, then the easy answer is that you need take no action, other than clearing the premises by the end date. It is advisable to also contact your landlord to discuss the condition of the premises because, if there are concerns, it is likely that you will be able to deal with them more efficiently, and probably more cheaply, whilst you are still in control of the premises. Otherwise, you may face a claim for dilapidations from your landlord.

If your commercial lease contains a break clause, also called a break option, then this may provide you with the ability to end your lease early. Check the wording of the clause carefully as some clauses refer to a fixed break date and others to a series of dates or even a rolling date, i.e. six months from whenever you exercise the break option.

Also, check very carefully to see what conditions apply to the break option because if you do not comply 100% with those conditions, then the lease may not end and you will be bound for the remainder of the lease. A recent High Court case found against a tenant who had tried to avoid paying the rent after the break date; the tenant was bound for a further 4 years, equating to £400,000 in additional rent!

If you have no break clause, then sadly you are unlikely to have any right to end your lease early. However, you could negotiate with the landlord to see if they would accept a surrender of the lease, but, if they do agree, they are likely to charge a premium. You may instead want to consider trying to sell your lease onto a third party.

If the end of your fixed term has already passed and you are still in occupation of the premises, then the procedure for ending your lease will depend on whether you have security of tenure or not.

For more information on this topic, or any of the other issues raised in this update, please contact one of our specialist solicitors.

Neisha Taylor
Neisha Taylor