How can a tenant limit their liability under a lease?

When going into business for the first time, a tenant should worry about his exit route if his new business does not work out as expected.

When signing a new lease (or taking an assignment of an existing lease) the tenant is promising to pay the rent, the landlord’s insurance premium and possibly a service charge for the rest of the lease term.

In addition there will be his own costs such as rates, business insurance, utilities etc.

The main options the tenant has are:


1. To find someone else to take over the lease and assign it to them. You may be able to sell it and recoup some of your money.

2. To surrender the lease back to the landlord.

3. To have a break clause.

Options 1 and 2 can be costly and are not guaranteed.

Option 3 is the only option within your control.

A break right is a right to end the lease early. It can be on a particular day (such as the third anniversary of the start of the lease) or it can be a rolling break (anytime on 2 months' notice etc).

The only conditions that a tenant should accept is that they are up to date with the main rent (not any other payments due under the lease), that they will hand the keys back and leave the property empty.

Before you agree terms for a new lease or agree to buy an existing business, talk to the commercial property experts.

Toomey Legal Limited can offer you impartial expert advice before you commit that will save you money and give you peace of mind. Call 01434 636084 for a free consultation now.

Or visit the website at toomeylegal.co.uk .