Break Rights In Commercial Property Leases

Have you considered the importance of break rights in commercial property leases? In this blog post our commercial property solicitors look at the benefits of a break clause in commercial property lease for tenant. We also look at the importance of exercising the break clause rights in a commercial property lease for your business.

A commercial property lease is a crucial agreement for a business. It governs the contractual day to day relationship between both the tenant and the landlord. A break clause is a significant part of a commercial property lease. It provides the tenant or the landlord with the opportunity to terminate the lease before the end of the lease term.

So, what is a break clause? It is a contractual provision that will allow a tenant or landlord, or both, to end the lease before the end date. This offers flexibility to the business as it changes in size or location needs. It can also offer flexibility for both parties in these uncertain economic times.

Break rights in commercial property leases benefit both tenants and landlords. However, in this blog post we are looking at the three main ways in which break rights in commercial property leases benefit the tenant.

• Flexibility.

Being able to exercise a break right in a tenancy provides businesses the opportunity to adapt to changing circumstances in the business. This could mean a relocation of the business, business growth or downsizing the business, for example. Having the option to terminate a lease when a business needs to can be a huge strategic advantage.

• Cost Savings.

Having the ability to exit a lease in a dynamic business environment can be hugely cost saving. It removes the costs associated with maintain a space that is no longer suitable for the needs of your business. This means a business can grow or change as required, without the fear of paying for unwanted space.

• Risk Reduction.

Within every business industry there are economic uncertainties. These include market fluctuations or unexpected events that could massively impact a business. By having break rights in commercial property leases it allows businesses to respond to these unforeseen challenges. Think of covid for example, working from home meant that suddenly office space was not required.

If you need help negotiating a commercial property lease for your business or for your property, call our commercial property law experts in Peterborough. We will make sure that your commercial property protects you and your financial interest.