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Ending a Lease Early

Are you thinking about ending a lease early? Are you about to enter into a commercial lease but want to give yourself the option to end the lease earlier than the end of the term if you can?

Are you thinking about ending a lease early? Are you about to enter into a commercial lease but want to give yourself the option to end the lease earlier than the end of the term if you can?

Leases are contractual and legal obligations. Just as a landlord cannot suddenly decide not to allow the tenant to use a property any longer, so a tenant cannot choose simply to stop paying the rent or complying with the terms of the lease.  To do so is a breach of contract and can lead to the defaulting party being sued for damages.

How can I end my lease?

As a tenant, you cannot simply end a lease early. A lease can only come to an end by certain legal means.  In summary, these are:

1. By effluxion of time

A lease will come to an end automatically when its lease term comes to an end.  If it is a one month lease, then it will come to an end at the end of the month for which it is granted; if it a five year lease it will come to an end at the end of those five years; if it is a 999 year lease, then it will to all intents and purposes continue for ever.

2. By contract

A lease can also come to an end on the happening of particular events, such as the service of a notice (e.g. a break clause), but only where the lease expressly permits this. If the lease does not provide for such early termination events then it cannot be ended early except in accordance with the below procedures.

3. By court order

Both a tenant and a landlord may be able to obtain a court order to terminate a lease early but only in specific circumstances. If a landlord does not permit the tenant to use the premises as intended the court may declare the lease null and void and the landlord will almost inevitably have to pay damages. Similarly, if a tenant is in breach of its obligations under the lease the court may permit the landlord to forfeit the lease.  In certain circumstances, the court may be able to forfeit the lease without a court order but these are very limited.

4. By agreement

There is, of course, nothing to stop the parties agreeing to end the lease early by the tenant surrendering the lease to its landlord.  However, the party that wants the surrender will normally have to compensate the other. If there is a significant amount of time left for the lease to run a landlord may ask for quite a substantial payment.

Can I transfer the lease to someone else instead of terminating the lease early?

In theory, a tenant can assign/transfer a lease to a new tenant, or sub-let a property to a new tenant, as an alternative to ending a lease early. However, you can only do so as a tenant if your lease permits this.

Please see Subletting or Assigning your Lease for further information on these options.

For more information

Please do not hesitate to contact an Everyman Legal Solicitor on 01993 893620 for a free discussion or email natalie.hopkins@everymanlegal.com

How can I make sure I am in a good position with a lease in

case I want to end it early?

There are of course a number of protections that the law provides especially to tenants. If a tenant’s lease comes to an end because the lease term has expired but the tenant still requires the property, then the tenant will usually have a right to renew the lease on an open market basis.  However, these protections will not extend to rewriting a lease that is simply unfair.  If a tenant signs up to a 999 year lease with rent that doubles every year and no way of ending it early, then the tenant will have to live with the effect.  This shows the importance of taking proper advice on the terms of the lease to ensure that it says what you are expecting it to say and that it affords you the options to end, assign or sublet the lease during the course of its term.

Our dedicated team of solicitors, based in Witney, Oxfordshire, would be happy to answer your questions.

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