What Are The Consequences Of Breaking A Business Lease Agreement? Before you decide on breaking a business lease agreement make sure you get educated on the consequences. If you do not know what you are doing it can end up getting you in serious trouble.
A business lease agreement is a written document signed by the landlord of a commercial/ business property and a tenant looking to do business.
It is a legal document and enforceable, which makes it important to study the contract before signing it and more so when you are about to break the conditions of the lease agreement. If you are thinking of breaking the agreement, know that there are consequences to consider. The consequences tend to get a lot more serious if you are bound to a month to month rental agreement.
Profitability, company’s financial condition and external factors are some of the common causes of a breach in the business lease agreement.
It is a fact that a contract breach can cause problems to the person or company breaking it, but since certain circumstances that is deemed way beyond control make you break a contract then you are left with only two choices, prepare for the consequences and find a way to get out of it without hurting yourself.
It is not wise to break or breach a business agreement even if it’s only a lease contract.
Below are possible consequences when you break a business lease agreement.
• Forfeiture of Security Deposit – Deposits are a normal business practice to ensure that the tenant will cover the unpaid bills, rent and other expenses that must be paid before they move out.
Security deposit are refundable, provided there are no pending unpaid bills but this can also be forfeited if the lease agreement has been broken by the tenant.
• Pay The Rest Of the Lease – There are landlords that will ask you to still pay the remaining lease, even if you have not consumed it yet or have no intention in continuing the lease. This is a big problem, especially when your reason for moving out is financial.
• Landlord Can Sue You – Never abandon the leased office because you will be giving your landlord ammunition to sue you in court.
Keep in mind that a business lease agreement is legal, binding and enforceable. So, breaking the contract by abandoning the office can leave you in a bad light, even with the judge in case you got sued.
Those are just probable consequences, and happening every day all over the world. You can prevent the above-mentioned circumstances if you will take the time to read the terms and conditions of the lease agreement.
Moreover, discussing your predicament with your attorney can get you the best solution to avoid problems.
A business lease agreement is possible to break, but just be ready to face the consequences if you will not prepare for it.