Tag Archive for: commercial lease

commercial tenants

What Happens If You Break a Commercial Lease?

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A commercial lease obligates both the landlord and tenant to abide by the terms and conditions put forth in the agreement for a set period of time, usually a year. Breaking the lease refers to leaving a fixed-term lease without paying the remainder of the rent due.

There are a number of potential legal repercussions if you break a commercial lease. You should get astute legal advice from an attorney with experience in both real estate and contract law if you are considering terminating a commercial lease early.

Operational and Logistical Costs of Breaking a Commercial Lease in Alabama

Commercial leases are legally binding contracts, which you cannot walk away from. This is unless you have an agreement with the landlord that allows early termination. You may need to pay the following in addition to the rent due and other leasing costs:

  • Termination penalties.
  • Cost of finding a new lease and advertising the property.
  • Clean-up costs.
  • Legal costs if an agreement cannot be reached with the landlord.
  • Any costs mentioned in the early termination clause.

How to Break a Commercial Lease Legally in Alabama

The first step to take when you want to end your commercial lease is to read the agreement. You need to look out for early termination and bailout clauses, which allow you to leave the premises if sales are low. Co-tenancy clause is another helpful clause that can allow you to break the lease legally. This is when the occupancy drops below a pre-set level or the anchor tenant leaves.

Commercial leases set in popular areas can usually be terminated early without any hindrance since the landlord can find another tenant quickly. This is especially if the landlord gets a higher rate for the space or you offer a lump sum payment for terminating your obligations.

These are a few other legal reasons to break a commercial lease:

  • You are bankrupt.
  • Your landlord breached a lease provision.
  • You and your landlord have agreed to early termination. You can enter a deed of surrender that releases you explicitly from all your lease obligations.
  • You are allowed to assign or transfer the lease.
  • You have a break clause or a termination clause in the agreement.
  • Your landlord has allowed you to sublet the property.

When Can a Landlord Break a Commercial Lease in Alabama

Contract law legally binds lease agreements in Alabama. Based on this, it can be broken under certain circumstances. You and your landlord should both sign an agreement if you decide to break the lease early, to protect against future legal action. Commercial landlords are allowed to break the lease in certain circumstances without the tenant’s agreement:

  • Tenant doesn’t pay rent on time.
  • Tenant damages the property or doesn’t take care of it.
  • Tenant violates the terms of the lease agreement.

The Landlord and Tenant Act of 1954 provides tenants with an added security of tenure. You should speak with an attorney immediately if your landlord is terminating the lease early without your consent. Landlords can refuse to renew commercial lease agreements under certain situations:

  • Breach of contract.
  • Landlord offers another suitable property.
  • Sub-tenant has leased a part of the building when the landlord wants to lease the entire building as one unit.
  • Landlord plans on rebuilding the building.
  • Landlord plans on using the building for their own use.

Evicting a Commercial Tenant in Alabama

Landlords can evict a commercial tenant for numerous reasons. Moreover, Alabama laws protect a tenant’s rights. Your landlord can only evict you if you violate the terms of the lease or do not pay rent. Landlord will need to provide the following to evict a commercial tenant:

  • Provide the tenant with a notice of eviction.
  • Landlord can file a complaint in court when the notice expires.
  • Issue a summons to commence the eviction process.
  • Tenant needs to respond to the summons deadline.

The court may order an eviction if the tenant doesn’t respond to the deadline on the summons. You need to be fully informed of all consequences of breaking a commercial lease. Don’t forget to seek advice from a commercial real estate attorney.

Showing That a Landlord Broke the Terms of Commercial Lease

You may have a legal reason to move if your landlord fails to satisfy any terms of the lease. You can show the following to break the lease:

  • That your landlord failed to make the needed repairs that compelled you to break the lease.
  • You gave the landlord a written demand for making repairs, which they were supposed to make under Alabama law. Landlords get 14 days in Alabama to make non-emergency repairs. You need to keep a copy of the letter. You can turn in the key when you move if the landlord doesn’t make the necessary repairs.

You should take pictures that prove the landlord failed to make the necessary repairs. This can be useful later on if the landlord brings any legal action against you.

Talk to a Skilled and Knowledgeable Real Estate Attorney – Book Your Consultation Today

Breaking a commercial lease can lead to significant legal complications and financial costs. Our highly rated real estate attorneys at BHM Law Group can help you prevent making any costly mistakes while making sure your rights according to the terms and conditions of the lease are fully protected.

We have also helped numerous tenants and landlords identify clauses within the lease agreement as well as utilize legal interpretations that might allow them to break a commercial lease legally. We are happy to provide you with a complimentary consultation. Call us at (205) 964-9764 or reach us online.

commercial real estate lease negotiation

Tips For Negotiating a Commercial Lease in Alabama

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A commercial lease agreement is a critically important legal document to protect your rights. A poorly written lease agreement can put you at a serious disadvantage if a difference or dispute arises at some point in the future. Commercial leases are often extensively lengthy and complicated, which is why it is prudent to have a knowledgeable commercial lease attorney by your side in order to draft and review the agreement thoroughly before signing.

This is particularly important if you are going to be responsible for the maintenance and repairs of a rented property. You should remember that you want the best possible deal while the landlord wants a tenant while negotiating a commercial lease. You should ask your commercial real estate attorney for advice if you don’t understand anything in the agreement. An experienced business lawyer will help ensure that you get a fair deal.

Here are a few things you should keep in mind while negotiating a commercial lease:

Understand All the Legal Terms

You should have a fair understanding of all terms listed in the commercial lease even before you attempt negotiations. This involves understanding every line after reading it painstakingly. You should also read the small print. Don’t hesitate in clarifying doubts with a commercial real estate attorney if something is not apparently clear.

Know Your Needs

It’s crucial that you head into negotiations after having a clear idea about your needs and priorities. You should also list factors and things that are non-negotiable. You will be better equipped for handling negotiations when you have a clear idea about what you want.

Come to the Negotiations Prepared

You should come to the negotiations prepared to get what you want. This means having a clear understanding of leases and putting a strategy in place. You should be prepared to back up any request you make with examples from other similar commercial leases in your area.

Start Negotiations with a Strong Position

Good negotiations take place when you have a strong position. You should start negotiations by taking up points that you believe the landlord will be less likely to compromise on or give up. Once you have successfully navigated these issues, you will find it easier to move on to less important concerns.

Don’t Become Too Rigid

It is vital that you are flexible in your negotiations. You should be prepared to stand up for your priorities, but you should also have a clear idea about how flexible you can be. It may be worth compromising on certain issues just to get the deal done.

Commercial landlords are less likely to budge on properties that are in strong commercial areas. However, commercial markets are open to change. And, if things change, you can always ask for renegotiations. While there are no strict rules, most commercial landlords are open to renegotiations when commercial rents go down in a particular area.

Be Reasonable and Realistic

Nobody appreciates a pushover. Commercial landlords don’t tend to appreciate possible tenants that come to negotiations with unrealistic expectations. It doesn’t matter how good you are at sugarcoating your expectations – they need to be realistic.

It’s crucial for you to know the commercial real estate market and commercial real estate business inside out. However, you also need to be realistic about the things you can expect to achieve during negotiations.

Consider Multiple Offers

Don’t be in a rush to sign a commercial lease agreement without taking time off to consider it completely. This is even when the landlord makes a tempting offer. You may end up making a poor business decision if you rush into things. Hence, you should take time to digest the little things on offer and discuss it with your employees, colleagues, and family. You should never take a commercial real estate decision lightly.

Remain Positive during Discussions

The best negotiations are those that have a positive tone throughout. You are trying to get a deal done and not pick a fight. You may not find it helpful to be aggressive or hostile. It is important that you remain constructive and positive.

Look Ahead in Future

Don’t just look at the immediate benefits but focus on the long-term as well. Commercial rent negotiations usually have long-term implications. You need to ensure that you would be happy with the terms 5 – 10 years down the line as well.

Have a Trusted Lawyer on Your Side

Commercial rent leases are often full of small print. However, don’t let this scare you away from negotiating for a useful deal. Always remember that even though the commercial landlord may know the fine print inside out, you have the law on your side. Having a good commercial real estate lawyer make the negotiations can prove to be invaluable to your interests. They can help you navigate tricky clauses for ensuring that the agreement is fair.

Contact a Competent Commercial Estate Attorney Today

Commercial leases can be difficult to negotiate because they are so complex. With a knowledgeable commercial estate lawyer on your side, you can fully protect your interests. The attorneys at the Birmingham Law Group are thoroughly experienced in handling different types of commercial lease negotiations. You can schedule a free consultation with one of our capable attorneys by calling (205) 994-0902 or completing our online form.