A commercial lease helps to ensure that a business has space in which to operate. It also outlines the responsibilities of the tenant, such as shared facility maintenance, as well as the main responsibilities of the landlord. Both parties should read the agreement thoroughly to ensure they understand their obligations and consistently fulfill them. Sometimes, business leaders find that their commercial landlords do not honor the lease as signed.
What options do tenants have when landlords do not consistently and completely uphold a commercial lease?
Tenants can take legal action
Provided that the lease is valid and that the tenant has documentation of the landlord failing to uphold the agreement, it may be possible to initiate legal action over the landlord’s omissions or violations of the lease. When landlords fail to honor a use clause that promises to avoid renting to a direct competitor or otherwise violate details of their leases, their tenants can end up in difficult situations.
If a landlord included the right of first refusal in a lease, thereby extending the possibility of buying the property to the tenant, legal action could prevent them from immediately selling to an outside party without giving the tenant a chance to make an offer. It’s the landlord has failed to maintain the premises in a manner that affects business operations, tenants may be able to take action to compel them to fulfill their duties.
The courts can also theoretically terminate contractual obligations in some cases where the breach has damaged a company or the working relationship with the landlord. A judge could even impose financial responsibility for the impact of breaches on a landlord.
Reviewing an original lease, landlord conduct and the impact that a breach has had on a tenant with a skilled legal team can help to guide effective legal responses. Business leaders may need to discuss their commercial leases with experienced legal professionals before they take any action or attempt to negotiate their issues with their landlords given all that is at stake, and that’s okay.