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FAQs

What are the options for a Tenant if it wants to terminate a commercial lease early?

A Tenant cannot usually terminate a commercial lease before the term is over unless the lease specifically allows for early termination, even if the Tenant’s business fails or if the Tenant vacates the premises. If the Tenant breaches the lease by terminating it early, the Landlord can seek money damages for the full unexpired term of the lease, subject to certain limitations and mitigation requirements. Before the Tenant signs the lease, it should attempt to negotiate certain provisions to allow for early termination in circumstances where its business has either expanded beyond the limits of the premises or has failed, including shorter initial term with renewal options, assignment and subletting rights and rights to “go dark” in circumstances of business failure or deficient income projections. Depending upon the Tenant’s relative bargaining strength as an anchor tenant or not, the Landlord may be willing to grant certain concessions.

© 2015 Lawrence, Lawrence, Stevenson LLP

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43 Queen Street West, Brampton, ON, Canada L6Y 1L9
Telephone: 905.451.3040 Fax: 905.451.5058 Email: lls@lawrences.com

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